Wednesday, September 28, 2016

Let us not get carried away on this preferred attire for mothers entering schools!


Both sides seem to have lost the plot on a simple matter of decency. As with everything Sri Lankan we use a “sledgehammer to crack a nut”. It is not the place of the Minister of Education to opine on this, and it is merely a matter for the parents and the school authorities to agree on norms, as it relates to their particular school, and NOT have across the board rules for the whole country.

It shows how out of touch most writers on this topic are: http://www.dailymirror.lk/116404/Dress-code-for-parents-How-incongruous-

Obviously most of the comments are in the English speaking media, as it pertains to the St Josephs and a Colombo notice, which sparked this debate and internationalized this, poking fun out of all context for the wrong reason.

Take the provinces outside of Colombo, and observe the movement of parents when bringing and taking kids from school. Remember, this applies mainly to small children, usually under 10 whom the parents escort to school or pick up with older children finding their own way, either by foot, school bus or push cycle.

What do you see? I have not seen ONE comment on this observation. Maybe you are all well off townies and I am just a small time villager. Some mothers cycle, and lately, I have seen mothers come in their motor bikes or scooters. Some even drive three wheelers. What do they do? They for the most part DON’T wear saris, and most often they are in skirts, slacks, and sometimes shorts, when alighting, to drop off or pick up their charges.

They then take a cloth (Redda) and drape it around themselves before entering the school, as it is considered appropriate to look more presentable and look modest when entering the school, than in their normal casual attire that they have to be in to run errands and ride these vehicles as a Sari will be too much of an inconvenience, unless they are the fortunate ones who are teachers or work in a Government Establishment, that requires a dress code.


So guys chill out, don’t make a mountain out of a mole hill, and permit our mothers to both feel comfortable, practical, and be able to multitask by being able to instantly change attire to suit the occasion, and use a practical solution, to cover their modesty. I for one believe that saris can be the most revealing of all outfits, that if draped in provocative ways can be the most offensive, and so please don’t inconvenience our long suffering parents in the hinterlands, by Colombo centric attitudes, clouding the real issue of merely being presentable in from of the public, which applies NOT only to mothers in this case, but also to fathers, who are held to a different standards but should not. 

IT SEEMS! 

Monday, September 26, 2016

A lament of a small business trying to increase capacity/productivity/profit! - TREASURY TAKE NOTE


I run a printing business which employs nearly 100 people in Biyagama, outside of the BOI. (Board of Investment Zones for export)  It is NOT in the zone and does NOT get any privileges, tax concessions and other benefits that companies receive at the zone.

Our main inputs are imported papers, and different types of inks. Our output is books, magazines, wrapping papers, newspapers, inserts and posters. During a very short period we also as one of 30 printers, print school books for the Govt. in the three months between September and November.

The taxation rate we pay on profits is 28% and we pay approximately Rs400K per month in EPF and ETF payments. We are running at full capacity, in mostly fully depreciated machinery that is quite old, and we have business that is about 25% more than our present capacity, that we turn down for lack of capacity. As we work at capacity, we run two shifts and work 24hrs a day, except on Sundays, where double rates of overtime have to be paid.

We are faced with a labor shortage of skilled labor, willing to work as Machine minders, who can work overtime when needed, and the labor shortage in this area amounts to about 25,000 vacancies. 

On Friday, we lost one member of staff who has been with us for 18 years, because he just got accepted to a job in Korea, and he had to fly out at a moments notice today. Korea's gain is our loss, as it will take some time to train a person to his skill level, whilst he is going to Korea to do a job of a laborer UNRELATED to this field. Of course he can expect a rupee equivalent compensation of Rs150K a month, about 2.5 times what he earned here including overtime.

1                   We have lately suffered from unannounced power cuts, which cause massive disruptions, when machines suddenly stop, and have to be restarted, with the attendant wastage, and losses. We have a high powered generator to run when we need to, but consumes a heavy diesel load, and cannot automatically start upon an unexpected power outage to prevent disruption.

2                   The Govt. gazetted a monthly pay increase of Rs2,500 per member of staff, (backdated to May 1st 2015) which when you add overtime to the increased basic wages, resulted in a wage bill increase of Rs500,000 per month. Annualized cost the company Rs6M(Govt loses tax Rev 28%)

3                   As of today, we are still owed, Rs3.5M from the Educational Publications Department (EPD) of the Govt. for School Books, which we invoiced before 31st December 2015, now over 9 months old. When we cost the job, assume a three month’s funding OD cost, NOT a 9 month one!

4                   We run on high interest loans and overdrafts, and accordingly we have had to increase our overdraft, due to the delay in receiving the payment above, AND for the purchase of paper for the current years books we are currently printing, where paper cost is over 50% of the invoice value of the books.

5                   We expect an advance payment of 20% of the invoice value of the books we currently print, within the next week, in order to reduce the OD, but that does not even cover the paper, for which we have already exceeded the 30day payments terms, and had to make payment.

6                   A final tax payment for the year to 31st March 2016 is due on 30th September 2016 of Rs3.5M, when we are still owed that amount from the Govt. for invoices that are over 9months old. We DO NOT get any grace period to make the Corporation Tax payment, while we are financing the interest on the late payment of the invoices for Govt. work.

7                   More important than this is the dire need to purchase machinery that can increase our production capacity, so we can increase turnover, replace inefficient, high energy consuming machines with the latest technology, which ALSO has built in energy saving features.

8                   The capital cost of the machine is Rs130M, for which we need to borrow Rs100M from a bank. However the current effective rate of interest of 15% on loans IS TOO MUCH. It does not make economic sense, especially when in the first year, where the new machine will only be working at 50% capacity, going up in following years. If however we are paying at similar lease rates where we are leasing a vehicle for the Managing Director, 9%, as the lease was arranged a year ago, we would go for the new machine immediately.]

9                   It is therefore ironic that we are funding a NON-Productive asset, a motor car at low rates of interest, and we are UNABLE to finance a high productive asset, which will never reduce in value in Rupee terms, as not only the evaluation of the business plan by the bank prior to granting a loan is ALSO arduous, but the interest rate currently prevailing is ALSO usurious!

CONCLUSION

I have clearly and simply summarized for a lay person, the dilemma a company such as ours faces today in doing business legitimately in Sri Lanka.

We not only pay taxes to the Government for VAT which is currently 11%, NBT currently at 2% and Corporation Tax currently @ 28%, and EPF and ETF contributions currently at 23% of payroll, but have NO relief.

The Finance Ministry is in the middle of drafting their budget for the year 2017, and requesting for suggestions from the public.

What would I say, in regards our business?

1                   We would like a level playing field in that all businesses who earn profits must pay tax, or we should all be treated fairly. There are just too many businesses that are STILL under the radar, not even having a tax file, and therefore NOT paying taxes that are due.


2                   Most importantly for us, I would like the Govt. to give us a three year interest subsidy of 500 basis point, for borrowings up to a maximum of Rs100M for the purposes of purchasing machinery, to increase capacity. In a world where our competitors overseas borrow at zero rates of interest, it is hard to compete if we have to borrow funds at 15%

3        Forcing private companies to make the mandatory payment of Rs2,500 MORE a month to our staff, was a move that affected profitability, AND the ability to reinvest profits in expansion, BOTH barriers to a growing Economy. With the labor shortages, depending on supply and demand the appropriate skills will command the higher wage rates, NOT JUST those that are dime a dozen, who were forcibly upped that skewed the wage differentials further.

It is clear to the reader of this real life example,  that we have Policy makers, who have NO clue how business operates in the real world, and how their policies are killing the growth of the economy, while making political decisions, that they believe are necessary. The MOST important and URGENT task is to ALLOW COMPANIES TO BORROW FOR CAPACITY IMPROVEMENT at rates MUCH lower than for purchasing unproductive items such as Autos, for which financing schemes are dime a dozen with no questions asked. 

IN a Economy that is running at FULL EMPLOYMENT, with severe labor shortages, that the STATE has  singularly been unable to provide suitably qualified people to fill, we have NO choice but to go for the latest labor saving technology, using the latest technology in the marketplace if we are to increase capacity, compete in the global marketplace, and grow our business, even catching the export markets for our products, which the latest technology will enable us to do. 

Friday, September 23, 2016

Civil Society’s Role in Conservation – Dr Pilapitiya’s Lecture to the WNPS @ the DBU on 22nd September 2016


The PM who personally requested Dr Pilapitiya to take the post of the Director General of the Dept. of Wildlife Conservation, should have attended this lecture, so that he could have got a clear explanation, as to why it is nigh impossible for a person with integrity to take on this post, and carry out his duties, in line with the Statute, the Flora and Fauna Act, which the DWC is duty to bound to enforce!

It was essentially an appeal for the Civil Society to work as one, or separately in taking the leadership of Conservation, which the Govt. has patently failed to carry out in the last 30 years, and do not appear to be willing to do so in the future either.

The lecture was made interesting with anecdotal evidence with video, illustrating the obvious threats to conservation, and the hidebound state the DWC is, in trying to do their job. The irony of it being, that when they try to engage in patrols to catch poachers. They are criticized by Politicians, so that the attitude, is don’t go on patrols against poachers, as that will keep them out of trouble! Pity the animals.

The place was absolutely packed to the gunnels and the notable environmentalists, conservationists, elephant and leopard and montane cloud forest ecosystem specialists littered the audience, and I would challenge that this had the highest concentration of knowledgeable environmentalists of Sri Lanka, ever in one place.

The issue is that all are aware of the problem and Dr. Pilapitiya was preaching to the converted, but with a difference. This is a DO OR DIE MOMENT FOR SRI LANKA. He threw down the gauntlet to the masses here present. Go forth and force your friends, the Company CEO’s the top Politicians, and all those holding the keys to do whatever they can to use the force of numbers, and pressure of numbers and assetsfor change from the status quo. Get Politicians to INSIST on actions rather than hollow promises, to reverse the complete destruction of the BIODIVERSITY hotspot that is Sri Lanka, currently in progress.

All those who left it were determined to do something, but what? Where do you start. The WNPS is the third oldest Conservation NGO in the world, being 123 years old now. It is best to plan for its 125th anniversary now, as a game changer that engages ALL stakeholders to commit to change the status quo, with POLICY decisions, matched with clear guidelines, enacted and enforced, to ensure that we are able to begin a long term path to reforestation, to a guideline of say 33% of the Country, along with clear practices to put Conservation at the top of the agenda.

None of this can be achieved without a direct engagement with the Media, especially the Sinhala Media, none of whom were represented here. It is they who can educate the public gradually to galvanize itself as a pressure group to complement and assist the main NGO’s driven my altruistically minded people, such those present at the WNPS lecture, who hail from the well to do English educated classes, who exchange all these ideas, amongst each other in the English press, through which there is coverage and a call to action.

This is a massive task, and it is difficult to even contemplate where the starting point should be. It is CLEAR that by NOT filling the vacancy of the DG at the DWC, the Government has reneged on its responsibility to the public in Environmental Protection, which it is charged to do by a STATUTE. It is therefore clear, that this leadership, that has been abandoned HAS to be picked up by Civil Society, and if need be by force, be taken over by an ARMY OF VOLUNTEERS as a gesture of patriotism, fight for the Country in its hour of need.

The one word of comfort that came out of this lecture, was that the Govt. was AT LEAST willing to listen to public pressure. When that is seen as a huge voting block, then action WILL BE TAKEN, so any harnessing of CSO’s must include strength in numbers that include local people in areas close to the Parks and Forests. If the politicians are frightened by the strength in numbers which are considered voting blocks, they are MORE willing to do what is right, as currently they are pandering to voting blocks, and if the Conservation Block seems to be the largest by far, the Jeep Drivers Block which is now considered large, and not to be messed with can be of lesser importance. It is all about power play after all!

In the end it is a no brainer, that strength in numbers, using social media, is the ONLY way to go, and to galvanize the youth in the rural areas for a cause they can also relate to, as environmental studies are NOW part of the school curriculum, and Youth are only painfully aware of the impending destruction of the Nation, of unchecked deforestation, that is indirectly a threat to the biodiversity of the Nation, and eventually for the existence of the Human Race in Sri Lanka.


There are examples of real life transformation and reversals that are compatible with sustainable local development in wildlife endangered areas,  that we can draw on and emulate as POLICY that is a WIN WIN for all stakeholders, which is seen as the only practical means for winning this battle. Let us put our heads together stop the blame game, and put forward a practical plan of action that achieves these multifaceted objectives, whilst winning the support of the people who live in the vicinity of the affected areas. Only then is victory assured!   

Thursday, September 22, 2016

ENTRY INTO SCHOOLS: Its time we put a FULL STOP TO SPECIAL TREATMENT FOR ANYONE!


Putting a child into the most desirable schools is a problem that is NOT confined to Sri Lanka. It is a worldwide phenomena. In most prestigious schools that are private, even they will NOT take a child unless the child aced that school’s entrance exam, so even money is NOT the only way in to elite schools.

This issue has reached incomprehensible proportions in Sri Lanka, as children of Ministers from Polonnaruwa have been able to put their children into Royal College, Colombo using their influence, so who decides how one should get in?

The raging controversy is with the GMOA who want to put their children into a FEW SELECT schools as a RIGHT! Of course there is NO LOGIC in why those schools were selected, as they are ONLY ones that are prestigious, and not local or provincial schools, which do not happen to be their choice, once they are transferred to those provinces.

I would honestly wish to know if a doc whose son was at Royal, and now he is transferred to Trincomalee, whether he would take his child out of Royal and send him to school in Trincomalee. There are NO cases, so it is simply a perk that they wish to uphold saying this has been agreed to by the GMOA over 12 years, see link


It was wrong to grant them that perk then, which may have been done by some kind of underhand arm twisting, which they want to continue as a right. If the GMOA or the Forces are special cases, then who are NOT? Everyone will feel entitled to this same treatment.

I don’t believe anyone has this right, and if that is the case then no one in future will make this request, and it will be fair by all, and will be easier upon the Principal of the school also, NOT being pressured by Politicians, and politicians too will be glad, as most of their constituency requests, which they cannot fulfill from their party supporters is this very same request to put their kid into the school of their choice, no matter they are really not entitled to it.


It takes TWO TO TANGO. So in order to shut the GMOA up for good on this issue, the Minister MUST say that there are NO favors for anyone, from now!

Tuesday, September 20, 2016

In Sri Lanka based on supply and demand, the best job for pay is COCONUT PLUCKER aged 16 earning Rs150,000 a month! NO TAX FILE either!


I had this boy come to me yesterday, asking me to help him get a job. He was 23yrs old, and a Carey College student, who had sat his A levels in 2012, in the Commerce Stream, and as his father had been unwell, and as the eldest in the family, he had to assist his father, and therefore has NOT worked until now, and he is looking for a job. He will only be sitting for his first exams in CMA accounting later this year.

Without any experience, the best I can do is get him a job as an assistant in an accounts department earning about Rs15,000 a month to start with, until he can show his skills. Of course the Company hiring him will have to spend time explaining the work and with the MS Office skills he should be able to get the hang of the work, and within 6 months if he gets on the Permanent Carder hopefully earn Rs20,000 a month. Remember that Sri Lanka has the highest concentration of accounting students per capita in the world. So the supply exceeds the demand, and that is why employers can offer next to nothing for these kids, and still they will agree to work to get the needed experience before they can move on!

I told him, that I know of a kid who has left school at O levels without passing any, and is now earning Rs150,000 a month into the hand in cash! Climbing Coconut and King Coconut trees for a living. With the MASSIVE SHORTAGE of pluckers, small homes with two coconut trees in Colombo Suburb area, are willing to pay Rs600 (for two trees) every two months to pluck the 30nuts from each of their trees. These 60 nuts have a retail price of Rs2,500, so the plucker kid knowing this, does the deal with the home owner to wangle Rs600. He has now scouted the area and has twenty different areas in Colombo that he goes once a month, with 10 homes ONLY a day on average, earning Rs6,000. That is a gross of Rs120,000 a month for 20 days, and most days he is home by noon, only needing to work for half the day! On some days, he buys the Coconuts from some homes @ Rs30 each and sells it at the nearby kade for Rs40 which then sells on to the Consumer at Rs50. He does this on about half the days he works, that is on 10 days, where he sells an average of 300 nuts for a Rs 10 profit. That is Rs3,000 a day for ten days, giving him the additional pocket money of Rs30,000, for a total of Rs150,000pm.

A young boy can climb up and down a tree quickly, and ten trees in a session is not asking a lot! He has a motorbike to get about it, though he is not old enough to have a license. If he does not drink or smoke, he will have a good house bought and paid for in three years, enough to support his parents while working, and be retired by 21 to become a Pol Mudalali having others working for him at that age!
He is NOT working for someone else, just for himself, so he does not come under any child labor rules. He is under the radar, so he keeps to himself, with a goal in mind. The homeowners are happy with him, as he is reliable, sometimes he takes a month off work, by letting his clients know in advance, that he is taking a holiday.

He knows that in future he will possibly be able to charge more, as the remaining tree pluckers, are getting old, and few youth are drawn to this vocation. Sri Lanka has NOT trained monkeys to do the plucking, and using the long “kekka” is not practical in Colombo area, as it is difficult to maneuver with a bike and going from home to home. IT is possible to use this on estates during the plucking periods.

He is confident that he will not have to do this job in 5 years, and will train someone else to work for him, and he will just get involved in driving a van buying the excess coconuts from these homes and sell them on wholesale or to retailers.

Frankly with a business mind like that, do you need an education? What good is that, so you if you are lucky enter University at age 21 and get your degree at age 26 and start looking for a teaching appointment which you may get at age 28 at the earliest, for a paycheck of Rs25,000 after having sponged off your parents till that age!

Frankly this guy can leave his vocation at age 21 with all the money he wants, and then get into a Masters program, as many private tertiary schools WILL enroll him if he can pay the fees, no matter he has NO O levels or A levels, and have his masters certificate at age 22 or 23 when others are still struggling to get a degree.

This simple example is for the youth of Sri Lanka, to understand what supply and demand means first, and go into fields that demand exceeds supply, if income is a priority, and realize that jobs most people look down on, are in fact extremely rewarding and lucrative, if you know how to parley it to your benefit.

Ten years ago when I was in the middle of farming, and was delivering 1,600 king coconuts to my customers in Colombo each week, the man I was going with to pluck coconuts had THREE families on the go at the same time, and he also did  double duty as a pol mudalali. In fact his net income then would have been higher than mine, after taking into account all my direct costs of farming, transporting and selling along with the wages for my staff etc.


DON’T forget these are the unsung heroes of Sri Lanka who are REALLY contributing to the growth of the ECONOMY. UNI Students better watch out! you are only leeching from the STATE contributing very little to your country, and worse demonstrate for rights, you really don't deserve. 

Friday, September 16, 2016

Kalawewa National Park – “Way to go from the get go!”



A relatively small land area, (possible to purchase land for expansion, from farmers in the area in future, at market rates, based on surpluses arising from the Park Operations) was demarcated and specifically designated as the “Kalawewa National Park” in 2015 and opened to the public.

This small area has the largest concentration of TUSKERS in Sri Lanka. I believe the whole Country as only 150 Tuskers out of an Elephant population of 6,500.

I had the fortune to visit this place last afternoon, and instantly saw the potential to protect this National Monument for the Conservation of Tusker Elephants for the future of MANKIND. Otherwise the Sri Lankan Tusker, has only a limited lifespan and we will forever be damned by future generations for NOT ensuring the species survival.

If we are able to identify and develop a balanced future for this place, we can ensure ALL stakeholders, the people of Sri Lanka, locals who are affected adversely by the creation of the Park, the visitors, the Environmentalists, the Govt. and above all the Wildlife of the Park who have only us to bat for them, get their just desserts.

We must have as our mission to save the Tusker from extinction, and ALL efforts at the Park should be congruent to achieve that goal, whilst generating the needed funds to do so from the Park itself.

What is the vision statement for the world? Kalawewa National Park will be “World renowned for the place that saved the Sri Lankan Tusker from extinction, and ensured its healthy return in the wild.” NOTHING MORE NOTHING LESS

How do you achieve this? We must enhance the environment conducive to the unhindered  movement, availability of fodder, and reproduction of these animals.

1                   We must preserve its character
2                   Gradually remove ALL human encroachments of cattle, buffalo, sand mining, fishing and poaching from within the confines of the park.
3                   Secure the borders of the park from inward and outward movement, but more importantly, clear the Elephant Corridor of human settlements for the free movement of Elephants between the Ritigala, Minneriya, Somawathiya, Kaudulla and Wasgomuwa sanctuaries.
4                   Provide an economically sustainable plan for its development to achieve the overall objectives of species survival without a burden on the State.

What is the Economic Plan we speak of?

Let us NOT FORGET that in Six Years, there will be a direct highway connection from the heart of Colombo, to Dambulla, which will be reached in 2 hours, and park entrance in a further 30 minutes.

A Columbian can come on a day trip of Tusker viewing, leaving at 5 am and seeing a morning safari and be home in time for lunch if need be, or to come leisurely and do this in the evening, and get home for dinner. I understand that 4 tuskers in one herd dropped in to the water this morning, when I checked up with the Tracker, taking a Poya morning party today within the park.

What is the IMMEDIATE DEAL for self sufficiency.

Any amounts borrowed from the Treasury to set up the initial working capital can be repaid with interest. This should be treated as a stand-alone project, unlike other DWC projects where ticket revenue is paid into the treasury and treasury allocations are then given for specific purposes. NO CONGRUENCE !

Trust me! do this as a special case, form a trust for the Park and let them run this independent of the DWC, to show what may work in future, and if successful the formula can be gradually adopted nationwide. Without a working example of taking over a loss making venture to turn it around to be a showpiece of the Nation will be both a challenge, but also an example to the public and the DWC of how much potential we have sacrificed due to the current policies, that are both outdated, and NOT conducive to the conservation of the Wildlife which they purport to preserve!

1                   Engage 5 additional experienced LOCAL staff who have traditionally taken visitors to the area as volunteer guides on the daily allowance. Usually too senior to be eligible for state employment. Engage another 5 LOCAL youth, with the aptitude for this work, who already have shown a love for the land, knowledge of the flora and fauna around them, and intend making a career in Wildlife. Once proved, they can be taken into the permanent carder, up the ladder into Game Wardens and Forest Rangers. The current practice of hiring people with political connections, from different areas, and NO connections with forest living,  is a disaster, as they are UNSUITABLE for the forests running home to MOTHER, as they are frightened of the dark, let alone Elephants. We have already STARTED ON THE WRONG WICKET.

2                   Build roads, a more permanent route that is passable during the rainy and wet season on higher ground that does not get flooded when the Tank overflows, and a second series that goes under water regularly, but which has the basic infrastructure for rapid access in and out. This must be carefully planned to maximize the viewing experience causing minimal disruption to the Wildlife.

3                   Assist 15 locals within a 5 km radius of Kalawewa Park entrance, including those whose lives have been disrupted on the establishment of the park, to purchase and run owner driver safari vehicles, to be operated on prescribed basis, that is fair to all, but who get exclusivity initially to ensure they are able to finance their vehicles.

4                   Restrict initial visits to 30 vehicle visits a day, MAXIMUM, for a party of 6 excluding the guide and driver, with a minimum 4 hour stay as a right to the visitors who can of course spend much less time if they wish.

5                   A flat charge for a vehicle, irrespective of local or foreign, therefore no chance of origin being open to abuse, or being unfair by anyone. This charge is to be Rs12,000 a vehicle, and if NO tuskers are sighted in the trip, a Rs2,000 instant cash refund to be paid to the main ticket holder upon exit. Customers will NOT be liable for any other charges, and tips etc are merely discretionary on customer satisfaction of the service.

6                   All vehicles will be allocated by computer random selection, so all have a equal probability of selection, and vehicle no shows penalized upon consecutive no shows based on a formula. Vehicle owner being able to receive Rs5,000 per hire, and all charges clearly stated on line, and on display with NO possibility of abuse of the system by tour operators/guides.

7                   All bookings to be made on line, with 50% deposit (Rs6,000) forfeitable upon a no show, with all proceeds going to the Park. The park will therefore benefit upon NO shows, a direct benefit to the animals!

8                   The 5 senior Park Volunteers referred to above will get priority with visitors, though they are only on a daily allowance, whilst the others on permanent staff have other duties, including maintenance, electric fence repair along with Civil Defence Forces allocated to sections. They will also be responsible for looking into the welfare of animals, and prevention of poaching and sand mining like in other locations.

9                   There will be a person entrusted to ensure that ALL jeeps keep to minimum standards of road-worthiness, and carry a cooler with water supplies for visitors, and responsible for the disposal of empty containers in an environmentally sensitive manner.

10              There must be a strict control of Park Boundaries, as locals are still used to encroaching out of prior practice, however the SAFETY OF ALL WILDLIFE IN THE PARK must be assured at all costs. I noticed Elephants that had suffered gunshot injuries, who should NOW feel safe within the confines of the park, being sure that there are NO untoward fears for their safety.

LONG TERM

When a decision is taken to have a Boat Marina for the benefit of tourists especially in the rainy season, then it is best to begin with locating this carefully, so that on the lines of Visitor Centers of US National Parks, there is a fully staffed place with franchise operators running restaurants, and gift or souvenir shops, lecture theatres on education and conservation, for the benefit of the visitors and enhancement of the overall experience of the park. There is NOT ONE national park that can attest to that in Sri Lanka today, which is a total disgrace.

Ideally there would be an all weather, paved road direct to the Marina. There will also be a 100 car, carpark that will ONLY permit cars and jeeps and NOT buses. Preferably underground if practical to minimize the use of space, and upper floors for restaurants to enhance viewing pleasure.

The Marina and water safaris can be developed therefrom, which will incur an additional charge, but less than the cost of the jeep safaris if one comes separately in one’s own vehicle to the Marina. IF necessary Boat rides can have a scale of charges depending on the times offered on a supply demand basis, but be restricted to at most, 2 boats on the water AT ANY TIME. These boats if franchised out, to be run on carefully regulated basis, of sound minimization and pollution level on water, in line with international standards. 

I would expect franchise charges to more than cover the cost of the building of the Marina complex over a short term, but MUST be done right from the start. Location, minimal footprint and disruption to wildlife, and distance from park entrance for vehicles ONLY permitted to come to the marina and NOWHERE ELSE.

As a separate exercise, I would expect the construction of ONE park bungalow for serious wildlife enthusiasts, paying a premium for its use, who can avail themselves of park facilities possibly at night, on a night safari, that can be priced at Rs50,000 per session, in addition to the lodging charges within the park complex.

CONCLUSION

These are some ideas that just come to mind, to establish an independent entity to run this park, as I am sure the Govt. is now contemplating spending money and are looking for ways to cash in.

As can be seen from my proposal it is more of a holistic approach to running a National Park in keeping with 2016 and beyond to 2025, and not using the quill pen approach of the last century, the way other parks are run, with the treasury taking as much as possible without ANY consideration if any of whether the payers are receiving even value for money anymore for their experience, a hugely short term way of squeezing every penny especially from foreigners, in a crass and indecent exercise, along with jeep owners and tour guides, using unscrupulous tactics, to deaden the tourists experience. They will NEVER RETURN to a SL National Park NOR recommend to their friends. That is our loss!

It is time we learn from the best in the world, on how we maximize the tourism experience, ensuring enhancement through time, to benefit Sri Lanka, its wildlife, and its people who are genuinely in it for the long haul to conserve, preserve and showcase our Country for generations to come.


I am afraid that unless a new thought process such as what I have proposed is enacted, the politicization of the National Park Service, which is still suffering from the lack of a capable Director General to even lead it will hitting the nail in the coffin of this aspect of our tourism pleasure, killing it in the process. 

Tuesday, September 13, 2016

The Preamble to a Budget if NOT understood, the preparation of the Budget is a waste of time!



Before the Treasury sets out to present the Budget for the forthcoming year, there are basic tasks that must be in place, with all those involved in the process fully aware of them, as every proposal therein MUST be congruent with the goals set.

PRIORITY ONE

1       Whatever is proposed MUST enhance the strength of the Sri Lankan Economy with evidence.
2       It must give confidence to the International Community to whom we sadly still have to go cap in hand both for investment and for borrowing.
3       It must be aimed at improving the credit rating of the Country, in order to reduce the borrowing costs. Especially the refinancing of external debt.
4       Map out a practical strategy for the repayment of 80% of the external borrowings falling due in 2018 and 2019, along with agreements in place to reduce the interest rates on refinancing, in a negative interest rate world.
5       This will IMMEDIATELY divert the “market angst” of the repayment of this debt, which is “A sword of Damocles” over the Sri Lankan economy. There is NO harm in making a political statement on the reason, but in line with the PM’s statement of ridding this Country from the Rajapakse debt trap, this could be the first indication of congruence of statements of STATE

PRIORITY TWO

1                   It must be clear that the domestic Fiscal and Monetary Policy Management is on track, with a hybrid system of placements and market based auctions, to ensure that there is a mechanism in place, so the SL Govt. borrows both domestically and internationally at the lowest possible rates of interest.
2                   Beefing up the quality of the team in the Monetary Policy Committee, so they understand their role, and perform their duty without fear or favor in the interests of the Country. This will be a game changer in confidence building.
3                   The historic high spread of the Banking System has over the years resulted in the SL economy at a GDP level of less than half its true potential. This MUST be reversed without delay. The Treasury and CBSL have not been in a hurry to do this, which has cost the economy dear, as they have merely looked at the short-term taxation of the Banks huge profits, and not the long term benefits to the exchequer and the economy of Companies making profits and investments. I can personally attest that even today, the high spread has deterred our investment decision of purchasing highly productive capital goods to improve our productivity in manufacture, which when extrapolated has a huge impact on the growth of the economy. If borrowing rates were 200 basis points less, we would have invested Rs150M in machinery, to double our current output in volume terms. I don’t expect anyone in the treasury to understand this simple concept that every small business owner does!
4                   In order to counter this enforced drag, I recommend that every company with turnover less than Rs1B be allowed to borrow at 300 basis points lower than present, except for purchases of ANY FORM OF VEHICLE.

The above policy will result in an immediate surge in credit. Many companies facing severe labor shortages, can only survive, without going overseas, if they are able to substitute with latest technology in digital form. Mechanization will become more practical, and hitherto, the high borrowing rates have been the reason for lack of investment.

PRIORITY THREE

Sri Lanka is at full employment and until the treasury realizes it all policy decisions will be flawed. Yes there is massive underemployment, but to get a person out of underemployment to work productively full time, requires a gargantuan mental shift of work ethic, and remuneration shift, that needs a change in the mental state of the Public.

The worst offenders are the Three Wheeler drivers, 500,000 who can be re-trained in more productive and remunerative work, 2 million stay at home mothers, and 1 million youth who would rather stay at home and wait for a job of THEIR choice to fall on their lap (many from political connections to get Govt. jobs). THEY ARE CURRENTLY NOT JOB SEEKERS!

PRIORITY FOUR

All employment incentives must take cognizance of three above, and be aimed at MAKING people WANT to take the employment opportunities in the private sector, currently over 500,000 which are going a begging. Politicians are inundated by time wasters looking for plum jobs in the Public Sector, and all of these people must be directed to a job bank agency to counsel them in what is treachery and what is civic duty! The definition of a prized job must change from one that pays a lot, in Govt. for doing little, and the ability to make money on the side, to that of one in the private sector that values skills and rewards work and effort.

PRIORITY FIVE

Set the budget proposals cast iron NOT leaving room for ambiguity, where the legal draughtsman is responsible for wording, format and procedure to ensure there is NO room for doubt, on who is covered, how it is calculated, how the  taxes and levies are collected, what the exemptions if any are and the effective date of change.

Above all this must be in line with the overall goals of equity and reasonableness. There should be practicality in enactment and collection and non-regressive.

PRIORITY SIX

All regressive taxes especially hitting the poor must be identified and SUGAR COATED, where the reason for tax is more health benefit like on high sugar content drinks (like Coca Cola) These taxes must be frozen as a percentage of selling price, no matter what the international prices are.

They may apply to Kerosene, Sugar, Flour, Milk Powder, Dhal, and first 50 units of electricity for a household. Stamp duty on transactional values of less than Rs500K reduced to zero. In this way all small land transactions will be recorded in the appropriate State Department.

PRIORITY SEVEN

All products with Price controls, subsidies, conveniences and concessions must be available at the State owned Sathosa outlets. Many private traders have STOPPED stocking these items, which then inconvenience the public.

Life enhancing products MUST be introduced. Night buses in all cities to operate from 6pm to 6am @twice the current rates, on routes of less than 50Km must be forced on those seeking licenses. It is too much to ask the state bus service to work at night when its staff cannot turn up to work on the day shift! This will allow night shift to grow, reduce costs of running a night shift, and hugely increase labor productivity and result in much higher wages with overtime.

PRIORITY EIGHT

If the above are followed, the political expectations of the budget will automatically get fulfilled, and no one can contradict its intent as that of being to BENEFIT THE COUNTRY, not place more burden on long suffering citizens.

People expect relief, businesses expect breaks, however the past year has seen a huge rise in costs of items people buy, and despite the reduction in the price of fuel, in retrospect it was a hugely foolish move. People just used more of it, so not benefitting the balance of payments, travelling more meant clogging the roads, moving out of public transport into private vehicles meant more traffic jams, making commutes even longer, and so the vicious cycle of a reduction of the quality of life of our people, with the lower tax revenue to the Govt. resulted. THIS WAS A LOSE LOSE FOR ALL despite political arguments to the contrary!

Worse, neither did the cost of public transport fall, nor did any of the costs of the products that should have fallen thereon! Surely we could have learned from other Countries which did not make such a foolish move when world oil prices fell.

PRORITY NINE

ALL This indicates the need for simplification of revenue raised, not a whole series of new taxes that complicate the tax structure even more. Granted the Govt. needs to raise revenue to plug the deficits. It should be done from increasing the tax yield from direct taxation from 10% back to the 20% if was in the late 90s. 500,000 wealthy people were created during this period, and none received a taxation file. Why not first find them and get them on the taxation train they have so craftily avoided so far. Stop hassling the people who are tax payers to squeeze a few more pennies from them.

The raids of the EPF inspectors to companies to check if deductions are made to all employees are legendary. This is bad for businesses who are finding it very hard to retain staff, and have very high turnover, and need at least 6 months before determining if a person will actually stay and contribute to the Company, let alone EPF. It simply does not make sense to put them on payroll on day one. It adds unnecessarily to the administrative burden of companies who already pay taxes. Find new ones for God’s Sake not go after tax payers! What kind of beast work’s for the Govt. certainly no one with a brain.

PRIORITY TEN
So how about a simplified tax structure, one that was tried and dropped, this time make it a goal to be achieved in the near term to the giveaway budget at the end of the term of parliament before the next election.

It would be good to have a flat rate so there will be no distortions. All taxes including VAT can move to the 15% mark adding capital gains taxes too but doing away with stamp duty at a flat Rs25,000 per transaction, so it will NOT distort property mobility, as capital gains tax will take care of capital appreciation!

Apart from the standard zero rated items, all establishments with Rs1M a month or more turnover must be vatable, as it is one means of increasing the catchment of direct tax payers that have escaped. Education can be zero rated, so the tuition master can be included in the taxation net. Of course a renewable energy policy would give concessions for imports of capital equipment and electric cars, set at 5%. It will gradually reduce our dependence on imported fossil fuels to negligible amounts in 25yrs.

This can be State Policy incorporated in the Constitution, to stress Environmental restoration, and a guaranteed human right to drink clean water, eat clean food, and breathe clean air, all else will immediately fall into place, automatically.

Of course tax breaks for recycling, elimination of plastic bags, and plastic bottles even for water, should form part of the taxation structure. Along with tax breaks for small enterprises providing clean water using reusable containers eliminating the need for disposable plastic bottles, that now even litter the ocean around us.

CONCLUSION

The people are waiting with bated breath in anticipation of a budget to beat all other budgets, especially in light of the previous disaster. DO NOT Disappoint it is a once off chance to make amends. It must offer relief to the less well off 80% whilst incentivizing the better off 20%, to work to the full, the latter being the most productive, risk taking, visionary and valuable members who will run small businesses and employ the less well off. The previous BUDGET failed both these sectors.

Remember the Budget’s immediate aim MUST be first and foremost be able to find suitable candidates to fill the 500,000 vacancies in the economy. This will reduce the dependency on the state whilst at the same time adding to the taxation of the economy, mainly in sales taxes from their earnings as well as the EPF!

It is a win win situation for all with the Private and Public Sector working together to achieve this not against each other as in the last budget where incomes were forced up, with companies losing money as a result.

Have courage, make Customs, IRS and other Revenue collecting agencies efficient professional and incorruptible. If the 500,000 new tax payers starting with the obvious 50,000 that can be harnessed within a week of effort which can yield Rs200B  instantly, a total of additional Rs500B can be collected. To balance this for fairness, any parliamentarian that has sold their vehicle permit must be taxed as Income Tax rates on that income.  

The need to raise the quality and efficiency of the public sector has already been covered earlier, as without it no budget can be administered effectively.

Let us get back to basics. The essence of budgeting is to show in a snap shot, how much revenue the Govt. aims to raise in the coming year, and how it is to be done through different modes of changes to the taxation and related revenue raising targets including borrowing.

That is then countered by the way it will be spent in the coming year. Last year both were way lower. The recurrent expenditure, mainly comprising the payroll of public servants, and pensions, Public Investment of the Capital Account is how it is divided. The latter will provide a social return to the economy in future years, aimed at obviously improving the quality of life of those who live in Sri Lanka.

 It is the responsibility of the Govt. that the above tasks are carried out in the most efficient manner. WE MUST PUNISH all those who make this task difficult, including the public servants taking bribes, and public servants not performing the tasks laid out for them. Acts of omission and commission!

All that is needed is just one budget that can change the mindset of the people to stop being crooked. If we begin at the top in the Finance Ministry, to show magnanimity and desist in the proclivity to steal from the public, and remove the crooked technicolored dreamcoat, we will be well on the way to prosperity.

This is an example of one person and his treachery that can take down a whole country with 20 million people. That is why true leadership matters and statesmanship which in Sri Lanka has been non-existent for so long is the need of the hour. Just one STATESMAN is all that is needed to change a whole nation!


LET’S PRAY WE FINALLY GET IT. WE HAVE NO OTHER OPTIONS LEFT!