What Sri Lanka’s 2019 Budget Tells Us About Its Economic Health

In the aftermath of political turmoil, Sri Lanka’s government will be hard-pressed to manage debt and growth in 2019


By Umesh Moramudali-March 27, 2019


Following one of the most dramatic political crises in the recent history of South Asia, Sri Lanka’s government budget for 2019 was approved by the majority of the parliament on March 12. The 2019 budget was supposed to be presented to the parliament in November 2018, but President Maithripala Sirisena’s unexpected (and later overturned) decision to change prime ministers in October 2018 pushed back the budget. Later, a Vote of Account was passed by the parliament to provide finances until the budget could be presented in March.

The political turmoil, which surrounded the country with great uncertainty, took a toll on the economy. With the rising political instability in light of the fall 2018 constitutional crisis, three agencies downgraded Sri Lanka’s credit rating.

On top of that, economic growth in the fourth quarter of 2018 dipped down to 1.8 percent from 3.2 percent reported in 2017. Although the entire reduction of quarterly growth cannot be attributed to the political crisis, it is quite clear that a very significant portion of the slowdown was a result of the political instability. This resulted in the annual growth rate growing just slightly, reaching 3.2 percent in 2018 from 3.1 percent in 2017. Economic growth continues to be stagnant. This year expected growth is 3.5 percent, rising to 4.0 percent in 2020. Amid this outlook the government will seek to bring down Sri Lanka’s budget deficit to 4.4 of GDP in 2019 and 3.5 percent in 2020 to fulfill pledges made the IMF when the country obtained financial support to resolve a balance of payment crisis in 2015.

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Budget Challenges

The 2019 budget was prepared amid this challenging economic environment, and reflects a variety of sometimes conflicting goals. First, the government feels the pressure to boost the country’s growth rate, which has been low for the last few years. Second, and related, the government must try to boost its popularity in light of the presidential and parliamentary elections due in 2020. In addition, the government is compelled to decrease macreconomic instability by reducing the budget deficit; increase tax revenue and the tax base; and rationalize expenditures as a part of its promises to the IMF. On top of all that, the government is supposed to manage massive debt repayments due in 2019 and 2020.


According to the budget estimates, the Sri Lankan government expects to reduce the budget deficit to 4.4 percent of GDP in 2019 from the 5.3 percent ratio recorded in 2018 and subsequently reach a budget deficit of 3.5 percent of GDP in 2020, in line with the agreements with the IMF. However, as ambitious the targets are, recent experience suggests that meeting budget deficit targets are very tough; more often than not the government has failed to achieve such goals. In 2018, the budget deficit target was 4.8 percent of GDP but Sri Lanka ended up recording a deficit of 5.3 percent, largely  due to a failure to increase tax revenue up to the targeted level.

The consistent failure of the government to meet budget deficit targets is largely due to issues regarding tax revenue. Over the last two decades or so, Sri Lanka’s tax revenue-to-GDP ratio has become among the lowest in the world.  In 2014, the tax-to-GDP ratio dipped down to 10.1 percent; since then, numerous efforts were put toward increasing tax revenue. Thanks to that focus, tax revenue increased to 12.6 percent of GDP in 2017. However, the tax revenue-to-GDP ratio saw another slight decline in 2018 as it fell to 11.9 percent, largely due to the reduction of tax revenue from external trade. However, the government is optimistic that it can raise tax revenue to 13.3 percent of GDP in 2019 and meeting the budget deficit target of 4.4 percent would largely depend on achieving that. Though it may seem an overly optimistic target, the government might be able to pull it off if the recently introduced Inland Revenue Act results in a significant increase of income tax collection.


New Income Tax Laws

To stem the consistent fall of the tax revenue-to-GDP ratio in Sri Lanka, the government introduced a new Inland Revenue Act in 2017 with the major aims of increasing the income tax net, simplifying the tax system, and moving toward a more progressive taxation system. The Act came into effect in April 2018 and increases the general corporate tax rate to 28 percent in addition to the rationalization of tax exemptions provided for both corporate income and employment income. Due to this, it is fair to assume that the revenue generated through income tax will increase considerably.

However, Sri Lanka’s taxation system is very regressive, like in most developing countries, and only about 20 percent of the tax revenue is generated through income tax. Almost 80 percent of the government revenue is generated through taxes on goods and services such value-added tax, custom duties, and excise duties. This means that a large portion of the tax burden is borne by the common people, and those who are rich pay a relatively lower share of their income as taxes. The heavy reliance on taxes on external trade is largely due to the large informal sector of the Sri Lankan economy and a strong industry lobbying to keep up high levels of protectionism by imposing taxes on imports.


Progressive steps such as the introduction of a new Inland Revenue Act and the adoption of new technology by the Inland Revenue Department may help to overcome the issue of taxing the informal sector and increase the tax base, but it will take some serious political effort to reduce taxes on the external sector without being influenced by domestic industry lobbying.

Sri Lanka’s Debt Crisis

However, a budget is about not only balancing taxes, spending, and growth. In Sri Lanka, public debt repayments have become the largest element of government spending and the amount keeps getting bigger and bigger. In 2017, government spending on health and education was 1.5 percent and 1.9 percent of GDP, respectively, while government spending on debt repayments was 4.8 percent.


The significant rise of the debt repayments is largely due to the increase of foreign commercial borrowing from international capital markets. Sri Lanka entered international capital markets in 2007 with its first international sovereign bond issue worth $500 million. Since then the country has issued international sovereign bonds more than 10 times. This has resulted in not only a significant rise of debt repayment, also increased Sri Lanka’s vulnerability to facing balance of payment crises.

The 2019 budget is very crucial from a debt management point of view, largely due to the massive debt repayments starting from 2019 due to the maturity of sovereign bonds. Debt repayments amounting to $5 billion will come due between 2019-2022 as bonds issued about a decade ago mature. $1.5 billion in sovereign bonds will mature this year; another $1 billion each in 2020 and 2021, and an additional $1.5 billion in 2022.

Nonetheless, Sri Lanka was able to pay the debt installments due in January 2019 due to sovereign bond maturity without much hassle, largely thanks to the good practices carried out by the Central Bank in foreign reserve management over the last year. Despite the significant drop of the exchange rate throughout 2018, Central Bank intervention to the exchange rate market was very limited. On top of that, the country has been receiving financial assistance as per an agreement between Sri Lanka and the IMF to receive an Extended Fund Facility (EFF). With these policies, the country was able to maintain a sufficient level of foreign reserves and successfully settled the sovereign bonds, worth $1 billion, that matured in January.

The 2019 budget has to manage these massive debt repayments even while reducing the budget deficit and lifting up growth. Large debt repayments mean that the government has to cut other expenditures or raise tax revenues significantly to reach the budget deficit target of 4.4 percent of GDP in 2019.

The government has done well in terms of fiscal consolidation in the last few years. Sri Lanka was able to achieve a primary surplus in its government budget of 0.6 percent of GDP in 2018. However, growth was still stagnant and the government will need to increase it and showcase some development, given the two big elections due next year. By this time in 2020, we will know how politically and economically successful this year’s budget was.

Umesh Moramudali served as a journalist and a columnist in a national newspaper in Sri Lanka for five years before pursuing a Master’s of Economics at the University of Warwick.

Rajapaksa Party Applauds RTI Act, Says Counter Terror Bill Will Take Away The Victory Of RTI 

MARCH 27, 2019

Former President Mahinda Rajapaksa and his Podujana Party members, warned Sri Lanka’s editors at a media briefing on 26th March that the proposed Counter Terror Bill will dilute the ‘peoples’ victory’ won by RTI.

Mahinda Rajapaksa

Pointing out that the RTI Act is a ‘good thing’, Dullas Allahapperuma said that the Counter Terror Bill will take away the importance of the RTI Act. The Bill should be opposed as it contains several provisions harmful to citizens and the media, he and the former President said.

Though applauding the RTI Act now, Rajapaksa’s Government refused to enact the law for several years, shooting down a proposal by then Opposition member Karu Jayasuriya to bring it as an independent members’ bill. Analysts were sceptical about the Rajapaksa praise for RTI now, saying that if they come into power, significant obstacles will be put in the way of the smooth working of RTI. ‘Government bodies may be instructed to ignore the RTI Act and the RTI Commission may be weakened as its active Commissioners will step down,’ a journalist-activist based overseas said.    

Meanwhile, the Rajapaksa push to ‘support’ the independent commissions reached bizarre heights when the former President sat as a ‘distinguished invitee’ in the front seats of the extravagant launch of the Commission to Investigate Allegations of Bribery or Corruption (CIABOC)’s action plan on tackling corruption held at the plush Shangri-La hotel, itself a site for controversial corruption allegations. Rajapaksa, his brothers and son have several corruption cases pending and ongoing in the fast-tracked corruption focused special High Courts.   

The launch was heavily criticised in the media as a RTI disclosure at the same time had found that the CIABOC had filed only one case involving more than Rs. 10m in court during the past ten years even though a staggering Rs. 2.3b of public money had been spent on maintaining CIABOC.  

The Colombo Telegraph also learns that several RTI appeals had filed at the RTI Commission by complainants who had complained to the CIABOC regarding instances of bribery and corruption in government entities and by politicians but had not been informed by CIABOC as to why their complaints were dismissed/not proceeded with. 

One appellant told Colombo Telegraph on the basis of strict confidentiality as his appeal was pending at the RTI Commission, that the RTI Commission had subjected the senior officers representing the Bribery Commission at the appeal hearing to heavy questioning as to why reasons cannot be given when a complaint is dismissed by the Bribery Commission without just informing complainants of the fact. 

He said that there were many similar appeals at the RTI Commission. There is a huge number of cases where the CIABOC decides not to proceed and does not inform the complainant why on a factual basis but hides behind the ‘secrecy provision’ in the Bribery Act to use it as an excuse for being as  ‘non-transparent’ as it could be, he said. The media should also ask CIABOC under the RTI Act as to the percentage of complaints that it dismisses, he added.  

‘Why should public money be wasted on a useless institution like CIABOC? Why are we funding grand launches while they do nothing or file cases that are thrown out of court?” he asked. 

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AI and political marketing

 Artificial Intelligence (AI) will become a key factor in the elections of 2019

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Wednesday, 27 March 2019 

Artificial Intelligence has become a hot topic in the recent past in Sri Lanka, with an eminent business personality explaining how his companies like Singer and HAYLEYS are using this technology to better serve the customers. Let me do a deep dive into this interesting area.

What is AI?

In simple words, AI is a technology which making machines work in an intelligent way, similar to the way that of how a human mind works. The key benefits of AI is that machines do not take a break like humans. AI will keep working 24/7, 365 days, whilst AI can be developed to interpret human dictates, but it will not get stressed like humans do. Practice has proved that with AI, an organisation can minimise costs and increase efficiency. AI can be designed to do complex tasks which include thousands of variables, which the human mind will find it hard to do. The most important benefit of AI is that it can help human beings make better business decisions, but it cannot supersede the skills of a corporate leader, which is a point many forget.

AI and marketing 

AI technology can be broken down broadly to three areas. Machine learning techniques, Applied Propensity models and AI applications. Typical machine learning techniques involve using algorithms to ‘learn’ from historical data sets, which leads to clubbing data and then predicting consumer behaviour.

For instance, Applied Propensity models can be fed with data, and with the use of algorithms ‘discover’ what kind of attributes a typical customer looks for from a category. For instance, in the tea category, a typical customer will purchase a brand based on the drivers like quality of tea, type of tea, and flavours. On the other hand, a brand marketing company may be driving the market towards wanting a ‘Ceylon Tea’ or a ‘Single origin tea’, which the market might not actually be wanting (not in the consideration set of the buyer). This can then lead to predicting consumer behaviour.

Such a study in the market place will take a minimum 3-4 months, whilst with the use of AI one can scan all the accessible data which is online, and then do this analysis for better decision making within just 4-5 days. In other words ‘Real Time Perceptions’ on a brand can be analysed using AI and there after predictive behaviour shared for better decision making on a brand.

Sri Lanka politics 

If one uses AI technology on Sri Lanka’s political landscape in the last three months, we see that typical drivers mentioned on the online discussions are dynamism of leadership, political savviness, international respect, being nationalistic, and economic growth. We can call this ‘discovered drivers’ in the political landscape of the country.

Based on a sample of 10,752 conversations online, we see the brand Mahinda Rajapaksa (MR) coming out stronger in relation to the other two brands, whilst on International Respect and Recognition attribute, the brand Ranil Wickramasinghe (RW) comes out ahead. Incidentally the brand Maithripala Sirisena (MS) is not getting traction on a particular attribute, which is a serious issue from a typical marketing perspective.

(The author has twice won the ‘Marketing Achiever Award’ in Sri Lanka in his 20-year marketing career. Currently he owns/ manage a portfolio of companies including one of the foremost Artificial Intelligence (AI) entities that serve the Fortune 500 companies globally)

Marketing?

With the above insights, in a typical political campaign one can convert insight about a customer and competitors, into a superior strategic position and plan that persuades voters to choose a specific candidate. But it has to fit with who the candidate is. When conceived and executed flawlessly, the result is more votes, and said person getting selected to high office. A classic example we saw was the famous campaign by former US President Barack Obama in his first term, and the campaign by Narendra Modi in India.

Digging deeper 

The beauty about AI is that one can dig deeper and get consumer insights that statistical analyses like Google Analytics will not be able to do. For instance, using AI one can do a brand equity study on the above discovered drives, and pick up the surge and loss in the last 3 months.

For instance, in the last 3 months, Brand MR has been surging ahead on the attributes ‘Dynamic Leadership’ whilst the other two brands has been losing ground, which means that if Brand MR was contesting for elections in the future, then we see the typical attributes that one must develop a campaign on. Namely, dynamic leadership, political savviness, good for the economy, and being nationalistic. If a deeper analysis is done, which attribute will give a stronger chance for ‘voter behaviour’ can be found out with a ‘predictive analysis’.

Strangely, the brand MS scores high on ‘international respect/recognition’, which may be due to the recent overseas visits that he has made and the media mileage received. Another insight is that we see that Brand RW is not seen on this attribute on the media front, losing ground on the very attribute that he is strong on in the ‘discovered’ drivers. 

A point to note is that such AI analysis can also throw out the perceptions people have which are low on the attribute ratings. For instance, Brand RW being low on the attribute ‘Nationalistic/ Nationally Proud.’

In essence we can summarise that the candidate who can effectively communicate how these needs can be addressed better by their overall solution, will garner support to be voted in at an election, which, incidentally, is marketing at its best. It would not be incorrect to say that it is the discipline of marketing that brings democracy into a system.

Why right?

This takes me to the next argument: if using AI for developing marketing strategy for a political candidate is right or wrong. In my view, using any tool that modern science gives to marketing a political candidate is the most democratic thing to do. The logic behind it being, first, that the product/service that is offered by a candidate must communicated effectively, in a manner so that the consumer is better informed on who best fits their requirement. Second, a typical politician is aware what a typical voter is looking for based on the issues faced in daily life.

Why wrong?

Where the use of AI and using such data for ‘marketing’ comes in for criticism is when marketing a candidate is done in a socially non-acceptable manner. This includes blocking of media by competitor political parties that are in power, below-the-line rivalry at meetings, voters not being allowed to vote, unlawful voting, etc., to name a few things which happen in many parts of Sri Lanka, just like in any other developing country.

But a point to note is that this is not confined to political marketing, but happens across many consumer brands too, of which I have first-hand experience, which is an interesting parallel that many are not aware of.

For instance, when a malted milk was launched once in Sri Lanka, the competitor bought up the key media belts on radio to block the new brand that was being launched, poached the competitor’s key employees, broke down the displays at the retail end, and pasted over the point of sale material, whilst adopting guerrilla tactics of promotions to undermine the competitor brand.

Some even go to the extent of stalking the route plan of a sales representative’s itinerary, so that at the retail end you block retail space, which to my mind is somewhat similar to the marketing that is practiced during an election.

The second point where marketing as a discipline draws flak when used in politics is when a candidate fails to deliver on the promise made after being elected. For instance, the collection of garbage daily, street lights not working, and even after complaining no action being taken to correct same, to name a few, when it comes to a Local Government Election. Then, marketing of a political candidate to high office can be considered unethical and wrong.

Sum-up

Hence we see how AI can be used for marketing a political campaign. In fact, I can share how category drivers in Sri Lanka and brand drivers for Brands MS, RW and MR differ, whilst this can also be done on the emerging brands like Gotabaya Rajapaksa and Karu Jayasuriya.

But the essence is that we see how ‘politics’ and ‘brands’ have many aspects in common, whilst it has its own industry-related peculiarities too. But at the end of the day, the winner is the consumer, and in this case the voter. Is it ethical? The debate will never stop!

Mysterious Mystery

Scarlet Pimpernel of Paradise   

27 March 2019 

When this column first reported that a ‘RED’ NOTICE had been issued on Mahendran, questions were asked, and eyebrows were raised!!! Now we are told that, at the request of the President, INTERPOL has issued a second notice on Mahendran!!! The MYSTERY IS WHY HAS IT STILL NOT BEEN POSSIBLE TO ARREST AND BRING MAHENDRAN IN??? Is Mahendran the elusive Scarlet Pimpernel??? WHAT, MAY WE ASK IS SO HIGH AND MIGHTY ABOUT THIS MAN THAT THEY HAVE FAILED TO BRING HIM IN OR, MORE IMPORTANTLY, WILL TOO MANY HAVE TO HANG, WILL TOO MANY IMPORTANT HEADS ROLL IF HE IS BROUGHT IN??? OR, WILL IT EXPLODE INTO A POLITICAL CRISIS??? The mystery is baffling but even more so, is the silence on the issue!!! THE SOUND OF SILENCE ON MAHENDRAN IS DEAFENING!!! We are also told that the President has requested the assistance of the Singaporean Prime Minister to arrest Mahendran - again the question is WILL THIS HAPPEN??? 

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How many of them?   

All the crooks are roaming free and nothing concrete is done about throwing the book at them!!! Into this abominable state of affairs, we have an ex-Navy Commander suspected of killing 11 people!!! This goes as far back as 2009!!! Didn’t anyone care??? That’s not where it all ends though, the Police, the supposed Guardians of the Law are not just breaking the Law THEY ARE MURDERING!!! It is going to be humanly impossible for us, as law-abiding citizens, to trust ANY POLICE OFFICER EVER AGAIN, REGARDLESS OF HIS RANK??? We are also told that there is a deadline for accepting complaints – what an exercise in futility when nothing is done about the complaints!!! What about all the other suspects who are roaming free??? Jaliya, Udayanga, and only the Good Lord knows how many others!!!

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 MYSTERIOUS  MYSTERIES!   

The Mysterious Mystery of unsolved murders continues to remain a mystery!!! Lasantha, Thajudeen and so many others!!! WHEN is the burning question??? Silence also shrouds the vast gulf of immeasurable lies, drugs, murders and deceit accredited to Madush!!! When something as disturbing as that is uncovered there is always a hue and cry but the initial noise always seems to die down with nothing positive being done!!! The colossal heroin hauls are too huge to even contemplate, some really drastic action needs to be taken and taken fast!!! There isn’t a day that some new haul is not discovered in a different place!!! It is most disturbing for us citizens to have to put up with!!! There has to be a KINGPIN SOMEWHERE AND THE AUTHORITIES NEED TO MOVE IN FAST!!! FROM WHERE ARE ALL THESE DEADLY DRUGS COMING AND WHO IS RESPONSIBLE??? 

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Learn and earn 

Wanting to get far in life is not a crime, it is the manner in which it is done that matters!!! It is wrong to try and get what we want and where we want by cutting someone else’s throat, by doing it at the expense of someone else!!! When you are anxious to get far in life, treat yourself as though you are learning a new skill!!! Set yourself a clear goal, stay focused on it and do your best!!! It takes courage to grow up and get to where you really want to!!! Most of the important things in this world have been achieved by those who have kept trying, especially when the horizons were bleak with no hope at all!!! Forgive yourself for not knowing what you learned!!!

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Budget was a non sequitur!   

The long-awaited Budget was a non sequitur!!! After Sri Lanka gained Independence and became a Republic there is only one instance in our history, according to past records, that a Surplus Budget was presented in 1955 by the late Mr M.D.H. Jayewardene. In a country of 21 million people with a current GDP of US$80 billion, why is it that the so-called Professionals and top Economists in the Sri Lanka Economic Association could not advise the Finance Ministry intelligently??? With confidence, people voted the Good Governance Government into power in 2015; but they have failed to arrest the declining trend in the Economy. The growth of 5% in 2015 has gone down to 3.1% in 2017 and now the Economists expect that the 2018 rate will dip further!!! The World Bank in its update on Sri Lanka for 2015, which was released a couple of weeks ago expressed alarm at the deteriorating state of the economy and feels that it will continue to dip without a significant recovery until end 2021!!! The second concern they have noted is the declining Labour Force and that Labour Productivity will have a negative effect on economic growth in the next two to three decades. The question is, are the top Professionals at the Finance Ministry, Prime Minister’s Office and President’s Office capable of giving the quintessential financial advice this country is so badly in need of???

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Log in to REALITY  

Philosophically speaking we can’t upload luck, neither can we download time and Google certainly does not have all the answers for us in life!!! Therefore, the wisest thing for us is to
log in to REALITY and maintain the status of our lives!!! Actually, the greatest mistake we humans make in our relationships is that we listen half the time, understand even less, think zero and react double!!! What the late and great Abdul Kalam once said was “A Door is much smaller compared to the house; a lock is much smaller compared to the door. A key is the smallest of all but a key can open an entire house!! Thus, a small, thoughtful solution can solve major problems!!!” It is really food for thought and a message that all of us should ponder in our lives. Abdul Kalam also said “Forget who hurt you yesterday, but don’t forget those who love you every day. Forget the past that makes you cry and focus on the present that makes you smile. Forget the pain but never the lessons you gained!!!” The lesson is to concentrate on the ‘small things’ they are what get you far in the end!!!

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Support each other  

I would like to give you one of my favourite quotes from Maya Angelou:

“Each one of us has lived through some devastation, some loneliness, some weather super-storm or spiritual super-storm, when we look at each other we must say, I understand. I understand how you feel because I have been there myself. We must support each other and empathize with each other because each of us is more alike than we are unalike.”

And I want to leave you with this quote about our all-powerful God, “GOD is like SOFTWARE, He ENTERS our life, SCANS our problems, EDITS our tensions, DOWNLOADS solutions, DELETES all our worries and SAVES US!!!  

Present power crisis Who is responsible?

By Dr. Janaka Ratnasiri-March 27, 2019, 12:00 pm 

While appreciating Dr. Tilak Siyambalapitiya’s article on the present power crisis appearing in The Island of 25.03.2019, I would like to fill in some gaps in his article and also make some comments on the President’s statement about the power crisis as appearing in the media on the 27th.

The three issues

There are three main issues contributing to delay in adding generation capacity to the system. One is the delay in awarding the contract for building a 300 MW dual-fueled combined cycle gas turbine power plant at Kerawalapitiya and the second is the long delay taken to complete negotiations and do a proper environment assessment on the Sampur coal power plant. The third is the delay in building a terminal to import liquefied natural gas (LNG) to the country.

Delay in processing the tender for 300 MW power plant

In respect of the tender for building a 300 MW gas power plant, a call for requests for proposals (RFP) for this project was announced by the Ceylon Electricity Board (CEB) in November 2016. The closing date of the RFP was given initially as 22.02.2017, but later extended by a few months. According to the RFP, the letter of intent (LOI) to the selected bidder was to be issued in August 2017 after receiving approval of the PUCSL and the Cabinet of Ministers. The initial phase of open-cycle operation generating 200 MW is to be completed by mid-2019 and the second phase of combined-cycle operation to be completed by mid-2020.

However, even after more than two years of announcing the RFP, no award for the building of this power plant has been made. A series of articles appeared in The Island of 27th and 28th December 2018 under the caption "Delay in building new power plants – Who’s to be blamed?", pointing the finger at the CEB for the delay. The article highlighted the fact that the main reason for the delay was the many shortcomings in the 500-page tender documents prepared by the CEB which failed to give the specification targets that should be met by the plant. Neither the CEB management nor the CEB Trade Unions has refuted these allegations. Had the tender evaluated and the award was made promptly according to the schedule, 200 MW of power could have been added to the national grid within a few months’ time. These shortcomings are described in detail in the two articles referred to above which may be accessed via:

http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=196713

http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=196764.

PUCSL not approving the CEB Plan

Both the CEB and the Ministry of Power and Energy were heard over the electronic media recently saying that one reason for the current power crisis was caused by the Public Utilities Commission of Sri Lanka (PUCSL) not approving the CEB’s long term generation plan in time. The latest person to join this campaign against PUCSL is none other than the President himself. This was reported in all the media on the 27th, and according to the Island of 27.03.2019, the President was reported as saying that "some officials of the PUCSL and several Engineers of the CEB had links to the private power plant owners and they obstructed the implementation of the long-term power generation plan".

Apart from the alleged link between officials and the private plant operators which I am unable to comment on, the statement that the present power crisis is caused by non-implementation of the CEB’s long term generation plan is far from the truth. According to Dr. TS, it was the non-implementation of the proposed Sampur coal power plant that has caused the present power crisis. It may be recalled that it was the President himself who decided to stop the construction of the coal power plant, announcing that he preferred a gas power plant instead. Perhaps, in view of many duties, he seems to have forgotten this.

The PUCSL was only recommending a plan comprising all gas power plants without including any coal power plants for base load generation in compliance with the provisions in the Electricity Act and it would also cause less pollution. Both the CEB management and trade unions vehemently rejected this plan and insisted that coal plants be included in the plan. Even if the PUCSL granted approval for the CEB plan promptly, it would not have prevented the present crisis. It is a pity that officials fail to advise the President and Ministers presenting the correct facts in this regard.

This dispute between the PUCSL and CEB went on for over a year and finally settled by the President by reversing his "no-coal" stand and approving the CEB plan to avoid CEB shutting down power to the country as they threatened intensifying their trade union action if their demand was not acceded. This is certainly not in keeping with ethical conduct expected from among the highest paid professionals in the country selected out of the best achievers at the GCE-A level examination. Was importing of coal a gold mine for them which prompted them to take such a drastic decision and trying to twist President’s arm?

The irony of the situation that though CEB engineers insisted on building more advanced coal power plants, they appear to be incapable of even maintaining the existing coal power plant. The Cabinet of Ministers at its meeting held on 26.02.2019 decided to award the contract for maintenance of boilers and turbines in the 3rd unit of Puttalam coal power plant to China Machinery Engineering Corporation, obviously because the local staff are unable to attend to this work, despite their working with the Chinese technicians for over six years. On the other hand, the existing combined-cycle power plants, one at Kerawalapitiya and two at Kelanitissa, are being operated and maintained by local staff without any problem. Isn’t this one more reason why CEB should opt for gas-fired power plants?

Delaying the commencement of the Sampur power plant

Even if the Sampur power plant was allowed to be built commencing in mid-2016, it would have taken at least five more years (typical period of construction for a coal power plant) to complete and would be available only in 2021. So, it is clear that stopping of the Sampur power plant could not have caused the present crisis as claimed by Dr. TS. Then, what is the real cause for the present power crisis? It may be recalled that the CEB entered into a memorandum of understanding with India’s NTPC Limited in December 2006 for the establishment of a 500 MW coal power plant at Sampur.

Subsequently, negotiations on modalities of executing the project with details of power plant specifications were commenced which continued for nearly five years, presumably because of disagreements between the two parties on such parameters as heat rate or efficiency, technology and unit capacity whether 250 MW or 300 MW. Finally, a Joint Venture was entered into by CEB and NTPC only in September 2011. Now, who is responsible for dragging the negotiations for nearly five years, which should not have taken more than one year, had the officials involved in the negotiations were competent and possessed negotiating skills.

Once the project was agreed upon, the proponent engaged an Indian Company to carry out an Environment Impact Assessment (EIA) which took another four years to complete and was released only in 2015. It took one more year to get CEA approval. In the meantime, work on the project commenced with ground clearing which caused many protests from the public. Subsequently, the matter was taken up by a public-interest organization who filed a court case highlighting many defects in the EIA report that was approved by the CEA.

The case, however, did not proceed in view of the President’s decision to cancel the project.

Disregarding President’s ruling to cancel the Sampur project, the delay in adding capacity to the system causing the present crisis is the undue long delay of over 12 years to complete the negotiations and getting the EIA report approved. Both the CEA and NTPC are totally responsible for this long delay.

If the negotiations completed as well as the EIA completed without any defects within say 5 years from 2006 when the work on the plant could have commenced in 2011 and that was before President Sirisena came to power. If the construction of the plant took all precautions to mitigate adverse impacts on the environment, it could have been completed without facing any protests within another 5 years. Then, by now, the country would have had the benefit of added 500 MW of power in the system. It is pointless blaming others for one’s own faulty decision making, and this applies to CEB and Ministry officials as well as all the ministers who were in charge of the power and energy portfolio.

Unsolicited proposals for building an LNG terminal

The third issue is the delay in deciding on building a terminal for importing liquefied natural gas (LNG). Here, Sri Lanka has been performing like a good-hearted lady who does not want to say no to anyone approaching her, as the local saying goes. First, India approached with an offer for a 500 MW gas power plant and a terminal and the government said "yes". Next Japan too approached with an offer for a 500 MW gas power plant and a terminal and the government said "yes". Thirdly, China approached with an offer for a 400 MW gas power plant and a terminal to be built at Hambantota, and the government said "yes".

Finally, South Korea wanted to install a floating LNG terminal with a capacity of 1 million tonnes per annum at no cost to the government on condition SL purchases the agreed LNG volume from the Korean Company for 20 years at market prices, and pay a penalty if the agreed amount is not purchased. Though the President was keen to say "yes" to the offer as he personally submitted a cabinet paper on it when the offer was first made, the Cabinet has not so far approved the offer for reasons highlighted in Dr. TS’s article. The head of state has apparently signed memoranda of understanding for these projects committing SL for undertaking them, I believe, without any consultation with the relevant authorities.

Out of these 4 offers, apparently only the offer made by China is now proceeding. Initially, the power plant was to supply power to the industrial zone to be built for Chinese investors in Hambantota to be managed entirely by the Chinese. Later, because of the legal requirement that only CEB could operate a transmission line, CEB was drawn into the project as a collaborator. Since a deep jetty is already available at Hambantota Port which is sparsely used, construction of an LNG terminal there could be undertaken with minimum cost. It is not known whether the terminal will import LNG only to feed the 400 MW power plant or import in excess and feed the surplus gas to the industries for use as a source of thermal energy.

With regard to the Indian and Japanese offers, the government established a tripartite negotiating committee to work out the modalities of establishing a joint venture for operating and maintaining a terminal for importing LNG in the western coast. The negotiating committee however does not appear to offer a level playing field for Sri Lanka as representatives with wide experience and knowledge on natural gas and LNG are sitting on one side, while those sitting on SL side lack such experience or knowledge. It is not known how the South Korean offer which came later but pursued by the President would affect the negotiations of the tripartite committee.

Locating a site for the terminal

According to media reports, studies are being undertaken to determine the suitability of Colombo Port to locate the land terminal to be built by the joint venture and the service of a foreign consultant is being sought to assist in this. Even from a layman’s point of view, however, Colombo Port is not the best location to build an LNG terminal, considering its limited extent and the volume of traffic using Port facilities daily. It is an international requirement that any LNG facility should have prescribed exclusion zones away from other activities. There is also the likelihood of the insurance premium for vessels calling at Colombo Port getting enhanced in the event an LNG terminal is located within the Port premises.

The other option of getting a floating terminal installed as proposed by South Korea is also not straight forward. The advertisement inserted by the Ministry calling alternative proposals to challenge the Korean proposal has indicated that the floating terminal could be moored within 9 km from the Port in a North-Western direction. The operation of such a facility in open sea during the South Western monsoon wind regime is not easy as evidenced from the operation of unloading of coal onto barges from coal carrying vessels, which is limited to only the non-monsoon period.

The next best option would be to utilize small vessels with capacity in the range 10,000 – 30,000 cubic metres to transport the LNG to a suitable location on the western coast. These small vessels are shallow and do not need deep jetties unlike the standard LNG carriers having capacity in the range 150,000 – 250,000 cubic metres. These small vessels are widely used today to supply LNG to low-consuming countries where large vessels cannot have access. The necessary LNG requirements could be sourced from any of the neighboring countries trading LNG.

Dr TS mentions about the large number of unsolicited proposals for LNG power plants and terminals. In addition, at government -to- government level, there are several unsolicited proposals. The reason for foreign parties and governments offering such unsolicited proposals for LNG power plants is mainly the inaction by Sri Lankan authorities. They would have seen SL as a potential market for LNG and knowing that the country has no expertise in the field and the lack of initiative by the government to develop the expertise, would have wanted genuinely to assist SL by making the offers.

Conclusion

Once the President ruled out the Sampur coal power plant in favour of a gas power plant, had the government policy makers and stakeholders got together and planned out a strategy to introduce natural gas to the country identifying its requirements in all sectors, followed up by inviting proposals prepared free of defects enabling all interested parties to respond, the present situation of having so many unsolicited proposals in hand could have been avoided. These proposals prepared to suit our requirements could have been then evaluated and the best offer selected on competitive basis without allowing any external hands to influence. Sadly, Sri Lanka lost that opportunity.

‘Rubbing salt in our wounds’: Thajudeen’s family hits back at Mahinda

Mahinda Rajapaksa’s claim that the star rugby player was killed driving at 175km per hour has irked the murdered sportsman’s family after his administration presided over a murder cover-up for three years. Sunday Observer can reveal new details this week, about the last few hours of Wasim Thajudeen’s life and how telephone analysis has linked officers formerly attached to the Presidential Security Division to the scene of the ‘accident’

BY AANYA WIPULASENA-24 March, 2019


The family of murdered Sri Lankan Rugby Captain Wasim Thajudeen broke its silence last week, after former President Mahinda Rajapaksa quipped callously at a SLPP event in Kegalle that it was speed that had killed the young sporting icon, even after a court ruled his death a murder three years ago.

Ayesha Thajudeen, the sister of the murdered rugby player has refused press interviews for many months. Her family, she says, has been faced with one bitter disappointment after the other for seven long years, on the road to getting justice for her brother Wasim.

But the remarks by former President, whose family is at the centre of the scandal surrounding the star sportsman’s suspicious death, goaded Ayesha into speaking to the Sunday Observer last week.
“It is ridiculous to still say my brother’s death was an accident when it is scientifically and judicially proven - with a clear court ruling - that it was murder,” Ayesha said in an interview, breaking her long silence on the subject.

Rajapaksa, now Opposition Leader told the SLPP rally in Kegalle that “only Knight Rider could have saved” Thajudeen, whose vehicle, he claimed, had been travelling at 175km per hour when it crashed on Park Road, Colombo 5 seven years ago.
At the time of his death, on May 17, 2012, Wasim Thajudeen was 28-years-old. His remains were recovered lying on the passenger seat of his charred car near Shalika Grounds on May 7, 2012.

Police ruled the death a traffic accident, with a report by a Judicial Medical Officer Ananda Samarasekera to back the claim. Samarasekera’s report found evidence of alcohol in the sportsman’s blood and claimed carbon monoxide poisoning from the crash had caused the victim’s death.

The strange death of a young man in his prime, his well-known relationship to the first sons and the rugby clubs rivalry sent the rumour mill into overdrive soon after the crash headlined in the newspapers. For years, speculation swirled about truth of the “accident”, ultimately making Wasim Thajudeen a campaign slogan in the 2015 presidential election, with the common opposition using his mysterious death to illustrate the hubris and impunity with which the former ruling family had conducted its affairs.

It is distressing enough for Thajudeen’s family that the murder investigation has taken this long to reach a conclusion. For Ayesha Thajudeen, the remarks by Opposition Leader Rajapaksa, during whose presidency her brother was murdered, was a case of rubbing salt in her family’s wounds.
“Our only hope now is that justice will be served by God,” she told the Sunday Observer. “Mahinda Rajapaksa is only making a fool of himself by making such statements. He is inviting unnecessary discussion when the court has ruled that it was murder,” she added.

Ayesha Thajudeen is right. In February 2016, following exhumation of her brother’s body and a second post mortem that extensively contradicted the first, a judge ruled that Wasim Thajudeen had been murdered. The CID was ordered to make arrests in the case. A panel of three doctors confirmed that Thajudeen’s femurs, pelvic bones and teeth had been broken prior to his death, a senior official familiar with the investigation into the rugby player’s murder told the Sunday Observer.

Former President Mahinda Rajapaksa has cause for concern. In the past four years, the investigation into Wasim Thajudeen’s murder has repeatedly reached very close to home. The Attorney General reported to court that there was “reliable information” that a defender vehicle linked to former First Lady Shiranthi Rajapaksa’s charity, the Siriliya Saviya Foundation, had been involved in the chase and abduction of Wasim Thajudeen on May 17, 2012.

Extensive analysis of telephone records on the night of the murder has identified phone calls involving Narahenpita Traffic OIC Sumith Perera and a Senior Superintendent of Police formerly attached to the Presidential Security Division (PSD), and placed at least one other PSD officer near the scene of the ‘accident’ on Park Road.

Analysis of Thajudeen’s mobile telephone has also revealed that he made a final phone call to his friend Sahreen Rief, shortly after midnight. The phone call lasted several minutes, and revealed the stunning detail that up to 30 minutes before his death, Wasim Thajudeen knew he was being pursued and marked for attack. Thajudeen told Sahreen during that brief phone call, that he would probably never see her again, authoritative sources told the Sunday Observer. Less than an hour later, the rugby captain’s car was ablaze on Park Road.

Phone call analysis has also found that then DIG of the Colombo Crimes Division (CCD) Anura Senanayake, who is also a suspect in the Thajudeen murder investigation for allegedly covering up the killing, called the CCD less than an hour before the murder and asked for a ride to the CCD Headquarters in Kolonnawa from his residence in Rajagiriya.

The Attorney General has informed Court that analysis was also being conducted into the telephone processing systems at the President’s House, the Presidential Secretariat and Temple Trees in connection with the 2012 murder.

There has also been endless speculation about an alleged love triangle involving Thajudeen and the former President’s son Yoshitha. Hambantota District MP Namal Rajapaksa and his brother Yoshitha, both rugby players themselves have been questioned in connection with the investigation into Thajudeen’s murder.

In August 2017, the CID questioned former first lady Shiranthi Rajapaksa in connection with the defender vehicle allegedly linked to her Siriliya charity. On the same day, Mahinda Rajapaksa’s youngest son, Rohitha was also questioned for five hours in connection with the investigation into Thajudeen’s murder.

Wasim Thajudeen, who also captained the Sri Lanka Rugby Team, led the Havelocks Sports Club team, while Namal and Yoshitha Rajapaksa played for the rival Navy Club team. In sporting circles, Thajudeen has been described as being arrogant and irreverent in his alleged encounters with members of the former first family. MP Namal Rajapaksa has always insisted that Wasim Thajudeen was a friend and fellow sportsman, repeatedly denouncing what he has called efforts by the current Government to politicise his murder.

In the first three years since his death, Police maintained that Thajudeen, after attending a party, was driving towards the airport when he lost control of his car and crashed on to a wall of Shalika Grounds, damaging the wall.

However, long time residents of Park Road, who spoke to Sunday Observer this week, said that the wall had been broken long before the accident in 2012.

Years after the preliminary JMO report, on July 27, 2015, CID submitted to court that they believed that Thajudeen’s death had not been an accident. On August 10 the same year, following Colombo Additional Magistrate’s approval, the CID exhumed Thajudeen’s body at the Dehiwela Muslim Burial Grounds.

A fresh post-mortem was carried out on the exhumed remains. In early December 2015 an expert board comprising Colombo Chief JMO Ajith Tennakoon, Specialist Dr. Jean Perera and Additional JMO S.G.A. Hewage handed over a second report to the Colombo Additional Magistrate Nishantha Pieris.

Its content startlingly revealed that Thajudeen had in fact succumbed to injuries during a brutal assault. The ruggerite had multiple injuries on his legs, chest area and neck. The report also contradicts Samarasekera’s original finding that the victim died of carbon monoxide poisoning.

Instead, the second post-mortem found that the mount of carbon monoxide present in Thajudeen’s body showed that he had died just before or only moments after the car began to burn.

As a result of the second post mortem report, Prof. Samarasekera, who had conducted the initial report in 2012, found himself in hot water.

When the case was taken up on February 25, 2016 former Colombo Additional Magistrate Nishantha Peiris ruled Thajudeen’s death appeared to be a murder and ordered CID Director to immediately make arrests.

Three arrests were made. Former crimes OIC Narahenpita Police Sumith Perera, Deputy Inspector General Anura Senanayake, and Colombo Chief Medical Officer Prof. Ananda Samarasekara were named as suspects for their attempts to cover-up the murder. The trio was not charged for their involvement in the crime.

In one of the hearings of the case Deputy Solicitor General Dilan Rathnayake said multiple calls had been made from the Presidential Secretariat to former OIC Narahenpita Police on the night of Thajudeen’s murder.

The defender vehicle has been a key lead for investigators. The vehicle bearing the registration WP KA 0642 was owned by the Sri Lanka Red Cross Society and donated to the Carlton Siriliya Saviya Foundation chaired by former first lady Shiranthi Rajapaksa.

This vehicle, originally white, was painted twice (to blue and black).Prof. Ananda Samarasekera, who is suspected of having falsified the first post mortem report into Thajudeen’s death only got a six month suspension as JMO. When the CID moved to arrest him, as the third suspect trying to cover up a murder, Prof. Samarasekera filed a fundamental rights application in the Supreme Court and succeeded in blocking his arrest by law enforcement. He joins a long list of Rajapaksa era officials who have obtained these unprecedented orders to block arrest in legitimate criminal investigations by the country’s apex court. The Sunday Observer made several attempts to contact Prof. Ananda Samarasekera for comment, but the calls went repeatedly unanswered. To date, the CID has only been able to arrest suspects involved in the cover-up of Thajudeen’s murder. To get to the actual killers has proved a far more difficult task. Shifting political sands, and the potential return of the Rajapaksa regime to power holds witnesses back from testifying, denying investigators critical information needed to conclude the case, officials familiar with the investigations told the Sunday Observer. In every emblematic case involving violent crimes committed during the Rajapaksa regime, investigators keep hitting this same roadblock. None of this is surprising to Ayesha Thajudeen. “The whole world knows what Mahinda Rajapaksa and his family are like,” she told the Sunday Observer, “what more can ordinary citizens do to find justice in this country?” 

ICPPG Questions The Queen Over Inviting Vishaka Dharmadasa To Buckingham Palace As Key Note Speaker At International Women’s Day Event

Vishaka Dharmadasa – Key note speaker at the International Women’s Day event at Buckingham Palace | Photo via @RoyalFamily

MARCH 25, 2019

The International Centre for Prevention and Prosecution Genocide (ICPPG) has today expressed severe disappointment with the Buckingham Palace’s decision to invite Sri Lankan Sinhalese activist Vishaka Dhramadasa as the key note speaker at the International Women’s Day event at Buckingham Palace.

The organization, writing to the Queen, said, “the choice at this time of a Sinhalese mother of soldier who went missing 21 years ago to be so heavily promoted by the UK Government is controversial in the light of ongoing protests by thousands of Tamil mothers in NE Sri Lanka some of whose children disappeared in army custody more recently.”

“The 8 March event in the Palace was billed as both Women in Peace and Security and the Preventing Sexual Violence Initiative. Mrs. Dharmadasa has not worked on investigating or preventing sexual violence to our knowledge, but her organisation was strongly endorsed by Sri Lanka’s most controversial alleged war criminal, Shavendra Silva, in a speech to the UNGA in 2014,” the ICPPG said.

We publish below the letter in full:

TO:

Her Majesty the Queen

Buckingham Palace

London

SW1A 1AA

DECISION TO INVITE MRS. VISHAKA DHARMADASA TO BE THE SOLE KEY NOTE SPEAKER AT THE INTERNATIONAL WOMEN’S DAY EVENT AT BUCKINGHAM PALACE

Your Majesty,

We, the ICPPG, an International Non-Governmental Organisation and Independent Legal Body representing the victims of torture and sexual violence from Sri Lanka, write to question the decision to invite Mrs. Vishaka Dharmadasa to be the sole key note speaker at the International Women’s Day event at Buckingham Palace on 8th March with the Countess of Wessex and Lord Ahmad of Wimbledon*.

In no way do we wish to diminish the important work Mrs. Dharmadasa has done in the past on behalf of missing soldiers’ families in Sri Lanka and we are deeply respectful of her own personal tragedy – the disappearance of her son when he was fighting in the war in 1998. Everyone has suffered in this conflict, including soldiers’ families.

However, the choice at this time of a Sinhalese mother of soldier who went missing 21 years ago to be so heavily promoted by the UK Government is controversial in the light of ongoing protests by thousands of Tamil mothers in NE Sri Lanka some of whose children disappeared in army custody more recently. It is also controversial to pick someone from an army family as on Friday the UN High Commissioner for Human Rights released her latest report on Sri Lanka which found that torture and sexual violence by the police and army targeting Tamils continued throughout 2016-18**. The High Commissioner’s monitoring report is part of a Resolution for which the UK is the pen holder so it must take note of its findings.

Indeed, we understand Mrs. Dharmadasa’s eldest son is still in the army and was present at the frontline in 2009 receiving captured or surrendered Tamil fighters. Since he belongs to the Artillery Regiment there is also a chance his unit could have been involved in the indiscriminate shelling of civilian objects described in harrowing details in a succession of UN reports. This means he’d likely be barred from a UN peacekeeping job.

On one point of fact we also understand Mrs. Dharmadasa in her speech at the Palace claimed she had mediated the 2002 ceasefire in Sri Lanka – that was actually the Norwegian government.

The 8 March event in the Palace was billed as both Women in Peace and Security and the Preventing Sexual Violence Initiative***. Mrs. Dharmadasa has not worked on investigating or preventing sexual violence to our knowledge, but her organisation was strongly endorsed by Sri Lanka’s most controversial alleged war criminal, Shavendra Silva, in a speech to the UNGA in 2014****.

We understand Mrs Dharmadasa’s position has been that sexual violence by the military is just the work of a few rotten apples rather than “systematic crimes”. We refer you to the 2015 UN investigation report (also backed by the UK Government) which shows this approach is a subtle form of denial:

“All of the information gathered by OISL indicates that incidents of sexual violence were not isolated acts but part of a deliberate policy to inflict torture (to obtain information, intimidate, humiliate, inflict fear). The practices followed similar patterns, using similar tools over a wide range of detention locations, time periods, and security forces, reinforcing the conclusion that it was part of an institutional policy within the security forces.” (para 591 A/HRC/30/CRP.2)

While there of course should be a role for women like Mrs Dharmadasa, who in 2000 led a delegation of mothers of soldiers to see the LTTE to try and find out what had happened to their sons, it does seem very odd not at least to balance her with a Tamil woman who is currently struggling to learn the truth about her son or daughter.

This choice also raises concern that in November’s PSVI meeting in London there will be a repeat of the 2014 situation where Tamil activists and victims were completely written out of the agenda. There are literally thousands of Tamil asylum seekers in London, many of whom suffered sexual violence at the hands of state forces. We hope, given the size and importance of the Tamil community in the UK’s political life, these victims will be given prominence at the PSVI event, along with the Tamil mothers still bravely protesting in the northeast of the island. Indeed, we would welcome Mrs Dharmadasa’s participation so she could be sensitised as to what the Tamil community has been through.

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Govt.’s 2019 Budget proposals are detrimental to women and children

 What is most afflictive about this Budget is its deceptive exploitation of women. It is packaged as progressive and pro-women, but get past the bells and whistles and you will find that it creates space for women to work during their every waking hour; it makes no attempt to remove or abate some of their existing burdens – Pic by Shehan Gunasekara

Wednesday, 27 March 2019 

The focus and attempt to create a gender-progressive Budget this fiscal year is indeed welcome. However, reading through the Budget proposals, it is alarming to see how many of its allocations to address women’s issues tend to further discriminate against women, or are very likely to endanger women, and the rights we have been fighting for, in the long-term.

Many of the perceived ‘progressive’ ideas that have been listed to help women have been lauded in the media. Some have gone so far as to call this Budget a women-friendly one, and at first glance there certainly appear to be positive developments. Dig deeper, though, and you will find that these budgetary allocations and policies, such as flexible working hours, crèches (day-care centres), loan schemes and more have not been carefully considered and in turn allow for further discrimination against women, possibly creating space for the abuse of young children as well.

Maternity matters

 The language used in the Budget proposal is indicative of more of a concern for the growth of the economy than the empowerment of women. Point 48, for example, states “The limited participation of women in the workforce is a clearly identified growth constraint.” Therefore, to boost the growth of the economy, it is proposed that the private sector is ‘encouraged’ to pay 50% of women’s salaries during their three month mandatory maternity leave. As reward for this, corporate taxation will be deducted by a maximum of Rs. 20,000 (minimum pay) for each employee on maternity leave each month. On the fourth month, 100% of their pay will be deducted from the company’s taxation. It is added that these terms will apply for a five year period.

What does all of this mean? Firstly, it undermines existing labour law for maternity leave. Mandatory maternity leave and pay schemes are already established by law and employers are required to follow it. Encouraging companies to do something they already should be doing by plying them with tax deductions seems completely unnecessary. What is likely to happen in turn, is that most companies will get comfortable with the idea of tax deductions for providing women their rightful maternity leave. If and when a new government decides to abandon this scheme, companies will feel entitled and more reluctant to hire women or give them their legally entitled maternity leave and compensation, as they have lost an unnecessary incentive. The tax deductions scheme therefore creates an unhealthy precedent.

 These incentives are expected to make hiring newly-wedded or pregnant women desirable to private companies, as they are often avoided by private employers. While this is a very real problem, this discrimination is a structural issue that needs to be addressed directly, by establishing effective long-term solutions. The proposed superficial incentives will erode the existing law for maternity leave, and we as citizens will be paying for this regression in both women’s rights and our tax rupees via these State-funded incentives.

Exclusion of paternity leave

While maternity leave is mandatory by law, paternity leave is not. If this budget truly were gender-progressive, it would have focused more on providing well-planned incentives for paternity leave. Instead, those who wrote this budget clearly believe that women are the sole caregivers in a family, placing the burden of reproductive labour heavily on the shoulders of the mothers. Paternity leave could bring about immense structural and long-term positive effects on our society. It would help chip away at patriarchal beliefs about women as sole caregivers; it would help men be more involved in the upbringing of their children and thereby strengthen family bonds; and it would allow women to have more free-time and in turn reduce issues such as postpartum depression. Instead, the Budget’s focus on engendering companies’ entitlement to tax concessions and changing labour laws to include nocuous flexible working hours for women, precludes any real attempt to ease the burden on working women. This should clear any doubt about the disingenuousness of this so-called ‘pro-women’ Budget.

Private company day-care centres

According to the Budget, maternity leave is not enough to ensure that women continue to be part of the workforce and boost economic growth. Once an infant grows into a toddler, they would still require a great deal of care, and so the newly-proposed Budget encourages the establishment of ‘child-care facilities’ by the private sector, via the “Rekawarana” Concessionary Loan Schemes of “Enterprise Sri Lanka”.

The wording with regard to this budgetary allocation is very vague. It is unclear if ‘private sector’ here refers existing companies providing day-care, or whether the concessionary loan schemes will be provided to individuals to start their own privately-run day-care centres. In either of these cases, monitoring of these day-care centres would be imperative. It should not be that only after a reported incident of child abuse or molestation will a day-care centre be investigated; regular and even unannounced checks can ensure that such children in childcare centre are safe and well looked after.

 It is stated in the Budget proposal that the Ministry of Women and Child Affairs will “issue necessary guidelines and the regulations for establishment and operation of child-care centres, after-school & vacation-care centres, and similar facilities”, with no mention of monitoring. Therefore, only once an incident is reported can legal action be taken. In many cases, children do not talk about the abuse they experience, and continue to suffer in silence.

Cases of abuse in orphanages, boarding schools and schools are endemic in Sri Lanka, but these are rarely handled with sensitivity towards the child victims. We need to improve our existing child protection systems before we even begin to discuss childcare centres, and then too we need to be proactive and ensure mechanisms are in place to prevent abuse, so no child will be subject to such trauma.

If this scheme is to be implemented, the Government must provide the Ministry of Women’s and Child Affairs funding to establish a unit to monitor all the child-care facilities mentioned in the budget. However, feasibility comes into question if there are too many to monitor.

Exploitative labour conditions 

 In another attempt to ensure women are hired in order to augment the economy, the proposed Budget calls for amendments to labour laws to allow for part-time, flexi-hours, and home-working. On the face of it, it would appear to be a relief for many working women. Perhaps women would not have to utilise those potentially unsafe day-care centres, for instance, if they are able to work from home and care for their child at the same time.

But that is precisely the double-burden working women have to endure. Our society is such that the burden of caring for your children, attending to household chores, and other unpaid labour is the sole responsibility of women. Instead of ensuring that men take on their share of this burden, workplaces will provide flexible work hours, so the women can utilise any or all the free time they can find to work on jobs where they can make an earning. This will leave women overworked and exhausted.

The double-burden aside, there are other ways women with flexible work hours are exploited by companies that employ them. For instance, in most part-time, consultant and flexi-hour contracts, EPF and ETF and health insurance can be, and are, easily excluded. A part-time worker lacks the agency to bargain for regular staff benefits, and would find it difficult to organise with other part-time workers. Amending labour laws to include part-time and flexible working hours would have to be extremely detailed to ensure women are not exploited in the workplace, but as mentioned above, it still saddles women with the double-burden.

What is most afflictive about this budget is its deceptive exploitation of women. It is packaged as progressive and pro-women, but get past the bells and whistles, and you will find that it creates space for women to work during their every waking hour; it makes no attempt to remove or abate some of their existing burdens.

Small measures that can make a difference to women, such as introducing paternity leave, are not even considered in this deeply problematic Budget proposal. What we have been presented with are superficial attempts to empower women, which will undoubtedly do more harm than good. To effect real change, we need structural changes. The benefits of such changes may only manifest perhaps some years later, but these will be far more effective in changing cultural attitudes and granting women a better place in society for generations to come.

(The writer is a member of the Liberation Movement, and is the consultant gender researcher at a law research organisation. She has a Master’s Degree in Gender Studies from SOAS, University of London, and years of experience working in the field of women’s rights.)