Tuesday, December 28, 2010

Lies, lies and bald faced lies says who?

Have you noticed that we are a nation of pathological liars? Those who don’t believe it, simply live in a cocoon of their own making. It does sound unpatriotic to say so, but then again it is even more patriotic to tell the truth. Their again begs the question, what is truth and what are lies?

Taking my first assertion, it seems pretty obvious that lying is not something that is the exclusive purview of the poor or less educated, who try to skirt the truth in their struggle to survive in a harsh world, and do so out of necessity. The shamefaced lies come from the top, and in my opinion, the pathological nature of the lies, make it seem that the liar also believes in the lies, which he may do, as he is not even in a position to distinguish between right and wrong.

We have been so used to being lied to we even vote for the politician who lies the most even though we know the promise made to gain the vote is too far fetched to hold any sense of reality. What does that make us? We have made lying normal.
So here I go again, “kalpanakaranna” is the operative word, in disseminating any item of news one hears or reads, and then come to your own conclusion, based on your ability to judge. You may be right or wrong, but you came to the conclusion based on your experience and knowledge.

Just a few minutes ago I received a text from Ada Derana, saying the Government has given approval for a 500 room hotel at a cost of US$500M to Shangri La. If you believe that is true, then a room will cost on average US$1M, and a minimum of 15% net return on investment is required. That is US$150K a year, which on 75% occupancy, very high by international standards means 240room nights. That is a clear profit of US$150,000/275 which equals US$540 profit per night on a 500room hotel, something that has yet to be achieved anywhere in the world.

So when we get pathological lies passed to us even in this form, where the sender is so dumb as to pass such asinine figures around as being fact, it is up to us the recipient of the news to have a good laugh at their expense, rather than at the next cocktail party make a fool of oneself quoting this text verbatim as if it is the truth.

The truth of the US$500M investment is probably not just for the hotel, but includes an apartment complex, and a shopping mall which when viewed in its entirety is more logical. We then come to the next point of discussion, of will it ever be built, and if so when will it be completed, in our lifetime or after!!! The obstacles and pitfalls are humongous and lets hope the investor does not back out.

Friday, December 10, 2010

A rational and consistent approach to the “resettlement of 150,000”

There are 150,000+ living in Colombo, who will have to be resettled within the next decade as part of the Colombo Redevelopment Plan as envisaged by the Town Planners. The UDA has now been entrusted to the Defense Secretary under the MOD. I don’t envy him the task he is entrusted with and hope it is handled with thought and consultation as we are talking about the lives of a lot of people of all ages, who will have to undertake, one of the hardest choices of their lives. Just look in the mirror and ask yourself, what you would do if you were asked to leave where you are currently living. What guarantees and assurances would you want?

I hope this necessary translocation will not become politicized, by either side, and most of all that no suspect insiders benefit from them. There has to be transparency in all the activities from using the land so regained as part of the development plan for the city, and providing long-term housing solutions that are effective.
If there is one thing we have learned from the Tsunami experience, then we must be able to tackle and effectively deal with the possibility of those who have been relocated, disposing of their new abodes and returning to their original haunts thereby completely negating the original purpose as happened in the Koralawella sea side tenements in the Moratuwa area that are now back to the original state.

It must be understood that people do not like to move, however uncomfortable, or primitive their homes might be. It is the neighborhood, schools, employment and a whole host of reasons that keep people attached. In the same vein you cannot relocate them into a neighborhood, and provide them with facilities and new homes, while people living in the new area are not provided with such, and create resentment and in the end hostility that further compromises the move.

Sri Lanka has not been able to build high rise community housing in close proximity to relocated property, as high rise living in the best of places like Wellawatte area private apartments have turned slum like due to inadequate maintenance. This leaves town planners with a very difficult task. They will have to scour the world to find the best compromise, as no scheme is going to completely satisfy our notoriously spoilt electorate, fed on political promises that cannot be justified.

I know people in Slave Island who have been given a paper informing that they will have to leave, but with no other information, leaving them totally confused, worried, depressed with the uncertainty. A notice to vacate should accompany with it available options, which if they accept within a short time frame will accompany them with goodies and preferences that may be denied later.

LAUGFS GAS IPO – Lessons to be learnt for the future

It was unfortunate that the Stock Market conditions were such that even with a share which was touted as being over 20times oversubscribed, the Voting shares barely ended the first day with 15% premium and non Voting with about 10%. If this happened three months ago these figures would have been about 3 times as much. There are a few salutary lessons that have emerged. Namely, it was known that Shell decided to dispose of their shares and exit this business in Sri Lanka, with the minority holder, the government having the first right of refusal. This created an added sense of uncertainty to the investors. Even though Litro is a fully government undertaking there is uncertainty as to what will be done with it, though the LAUGFS Board was not worried. This overhang was not good timing.

The other point is that there were so many shares issued that it was inevitable that the desire of the small shareholder is to sell on the first day, especially as the number of shares given to them was also very small due to the oversubscription. I have 500 non voting shares which if I sold today would have given me a profit of Rs750 hardly worth my while in taking the risk of uncertainty into account. A large investor should have been lined up, as was the case with the last Hydro Power Free Lanka IPO, to support the price. In the latter case he supported a 50% premium which has stuck, but granted he bought one third of the new shares.

At the various briefings on the IPO the confident Chairman was confident in his attitude. I asked him why the Prospectus did not state (as is done in all other countries) that the existing shareholders will agree not to sell their shares for a time period of say 3 years. His answer was that they were reluctant to issue even this amount of new shares, why would he or his partner want to sell, and gave oral assurance to that fact. Well that assurance is not in writing and does not hold legal standing. It is the fault of the CSE new listing rules that do not require this clause.

The ‘Roadshows’ were well attended and a lot of money spent on schmoozing and advertising, but the shares are now at real risk of going below the issue price. That kind of ignominy is something that the Board will not countenance and will probably support at the issue price by purchasing, especially as the employees, dealers and customers of LAUGFS who were given preference would stand to lose.

It therefore goes to show that despite profit forecasts being achieved, substantial over-subscription resulting in a record of Rs50B of interest, the issue could be considered a flop in the eyes of the public. The company has achieved its immediate goal of raising the required funds, but future confidence is questionable.

Thursday, December 9, 2010

There is no FDI in the private sector, for that matter even Local Investment

It is almost unbelievable that over a year and half after the hostilities ended, there just is no increase in private sector investment, from Local or Foreign sources in Sri Lanka. The Central Bank statistics amply point out there is no net Private Sector Job growth either. All the domestic job growth in the past 5 years has been in the Public Sector and Security Forces. The budget was aimed at increasing Private Sector Employment by providing more incentives.

There is no time to waste, as the government seems intent on doing keeping busy with accusing the opposition of a host of ills, to shift focus away from the real problems at hand. The stock market has risen to great heights in anticipation of the future, but if there is no real activity, we could see a crash of confidence followed by a crash in the market with the inevitable consequences for the economy.

A liberal budget is not the only requirement for takeoff. It is the confidence of the investor that the conditions are ripe for new investment. That is not there. The banks are awash with money with no one borrowing. I can get Rs1B loan at .25% above the repo rate, namely at 7.5%, but I do not have credible investments to invest with confidence that will guarantee a return, worthy of me taking the risk.

The question as to why this is so is what the Government should be asking. Once they can understand this and act on changing the scenario, only then will the investors move in with Investments and Expansion of existing businesses. I am not saying there is no Investment, it is that the level has not changed from pre conflict days. The level needs to be much higher if we are to grow at a rate that is forecast.

There is a lot of hype in the press about new hotels being built, but until we actually see construction taking place these are all still on drawing boards. I agree the power projects are good investments, as well as the expansion of the Colombo Port, but other infrastructure projects will take a very long time to payback, and if we do not have a return to be able to debt service in the short term we will have severe problems to pay off our foreign debt. This will especially be so once the Eurozone and US economies pick up, and then we will find it more difficult to borrow to repay loans falling due, unless they are refinanced at higher rates.

The logic that is used now to keep the exchange rate strong, so that our imports and borrowings can be cheap will then immediately evaporate, resulting in a huge depreciation to protect capital flight, something that will then become hugely counterproductive. The answer lies in ensuring we start viable investments without delay, having regard to the investment climate, which MUST BE IMPROVED

Wednesday, December 8, 2010

What happened to the Night Bus Service that there was such a hoo haa about?

Those of us who work all hours, and keep the engine of the economy running had occasion to be greatly assisted by the night bus service that the Government with a lot of fanfare publicized about 3 months ago. When I work late in the heart of Fort sometimes till 9pm, I have no way of getting home, short of walking the deserted streets which I have done. For a fearless walker like me having to risk my life over the uneven pavements full of potholes and obstacles is foolhardy. Not muggers, drug addicts or inebriated Security Forces personnel do I fear. It takes me a brisk 40 minute walk to get to the flat I rent. How about to Malabe, Athurugiriya, or God forbid, Godagama where my farm is, there is absolutely no hope of going.

Further for passengers taking the intercity night buses or arriving from outstations, there is no relief, having to wait till 5.30am for the buses to start again. When I take the 2am bus to Minneriya, at what time should I get to the Gunasinghapura bus stand? Unless I have a generous friend who is willing to drop me at 1am I can’t even attempt this journey. I am therefore still waiting for this to commence.

Another case of “it has been conveniently forgotten”!! Rational people do not believe a word that is said in the media, especially as it concerns an agent of the Government making a proclamation. It will never happen, and at best if it does happen it will be very temporary, as the sustainability is not thought through.

So let us agitate again for this. Forget the state bus service. Allow private operators to do this with a fare that is double the normal fare for those boarding a bus from 6.30pm onwards to 5.30am. Then set up a once every half hour or once an hour service depending on the route, having regard to load factors etc. If there are no takers, give me 20 route permits, and I will organize the whole of Colombo night bus service, but no bribes to any officials please!! I will take the credit for setting it up and I will also have my nominee vying for the Mayor of Colombo.

It is so irrational to have to pay four times more for me to take a three wheeler to travel the 3km to the Pettah private bus stand than it costs me to go to Minneriya from there. So my suggestion is a no brainer and if we are to take Colombo city to being a 24 hour vibrant hub that is a vital ingredient to the much hyped growth.

The resources of the city are so underutilized because of the fact that except for the wealthy, the place is out of bounds for the average citizen to enjoy its beauty and vibrancy that would be enhanced by such action, spawning a further set of businesses and entertainment for the masses in one place. It is important therefore to lift the price controls on public transport for at least the hours I have suggested.

The immense responsibility placed on Journalists in Sri Lanka today

We are again confronted by a fracas in Parliament where the “Head Lines” of an article published in an English Language daily had been used to accuse an opposition parliamentarian. Despite the clarity of the article in the papers, the inaccurate insinuation made in Parliament by a government with a two thirds majority is a forerunner of a very grave crisis in the country, where every wrong of the government is turned around by the wrongdoers and blamed on the hapless, yes hapless opposition. I reiterate hapless, because if anyone of the readers have been to parliament and listened to a debate, one can be sure that the opposition is hardly ever allowed to finish a sentence, without a cacophony of whistles boos and boorish conduct. It is ironic that some members choose to speak in English. The reason being that many don’t understand what is being said, and when they listen to the translation, by the time they get it on their headphones it is too late to boo at the point. This allows the English speaker to get his point across uninterrupted.

In light of this I appeal to the journalists, if they have any self respect left to understand the ethos of journalism, where one has to be clear to report facts, and then if there is interpretation, clearly attribute it to the source or event and not imply it is fact. This is especially so where there is self censorship of opinion for fear of retribution. Sadly the latter is commonplace in Sri Lanka at present.

To belabor the point, a minister stated that bus fares (presumably only in Colombo) would be reduced during peak hours. The context in which it was made was not clear in any of the reporting. Was it because there was too much traffic in during this time and the intention was to get people who use cars to get onto the buses?

I don’t know the answer but if it was this issue can be argued in many ways. There is no question that it takes longer each day to come to Colombo from the suburbs as 500,000 commuters to every day. I should know because I am a part time delivery driver of a lorry laden with agricultural produce that I bring into the City. How then can we improve the traffic situation? We experimented with a parking lot in Ratmalana, with buses to take people into the City. It did not work, but instead of honestly looking why it did not work, we automatically assume that is not an answer.

Was it because of the lack of safety of the car park, where a person’s second biggest asset is parked unattended all day? Was it because the buses ran infrequently so it was not an option? These issues must be elaborated upon by the journalist, because the minister making the statement is non specific.

What happened to the much touted Airport Express that in total has carried 80 paying passengers to date? Where is the investigative journalist on this? Are you afraid of exposing a half baked execution of a theoretically excellent idea?

Tuesday, December 7, 2010

Kalpanakaranna – Absence of news is the most important news- just think about it

The aim of this blog is to enable people to think for themselves. You may or may not agree with what I write, but at least you are able to comment and I have never removed a comment that I disagreed with unless it was censored for foul language.
In that vein, it is not just what is written in the media that is news. In countries such as Sri Lanka where the press is gagged, often what is not written about is news and we are left to surmise and sometimes make insinuations that are not correct because of the inability of investigative journalism to get the true scoop.

A case in point recently was when the Commonwealth boxing Gold medalist, Manju Wanniarachchi was stripped off his medal due to testing positive in two tests, for Nandralone, a banned substance ostensibly administered to him by a homeopath by the name of Mudannayake, who the police were investigating.

The shame for him and country, was not mentioned in the press anywhere be it in print, or in TV. It was conveniently swept under the carpet. A thinking individual can only come to one conclusion, namely that the press was gagged as this is a news story worthy of being broadcast. The question then arises as who did the gagging and why. Then we come to the next point as to who it would be most embarrassing to. His promoters and those who helped guide him through, namely those other than him who took credit for it and who suddenly seemed culpable.

Who heads the boxing federation in Sri Lanka, just Google and check that out!! Should he be embarrassed? If so why? Is his integrity in question? Is there a loss of face? Has he threatened the press? Is anyone in the press willing to come forward to confirm or deny this innuendo as it is only an innuendo in the face of a lack of clear corroborative evidence?

Well these are the questions of news that we bloggers have to take on board if we are to be true citizen activists protecting individual and collective freedom of our motherland from unpatriotic forces who seem determined to take us down a road to obscurity. The country is facing a threat of disinformation and misinformation.

This example is one that should get serious bloggers to report news items in a responsible manner that the press is unwilling to share, due to reasons beyond their control as they are dependent on powers to provide them with various benefits, like livelihood and profits that are not required in the blogging world. The Sri Lankan blogosphere is probably the only area that currently is not censored or self censored, as even prohibited websites can still be accessed in a roundabout fashion.

A thinking individual can then judge for him or herself having regard to the agenda of the blogger, as evidenced in the stance of the content.

Friday, December 3, 2010

The intractable problem of the Tamil Diaspora as recently re affirmed - the UK fiasco

I call this a problem that needs to be solved and can be solved if the Sri Lanka Government takes a constructive approach to handling it with professionalism and boldness in its diplomacy, with less use of anti-Western rhetoric.

Firstly I do not think any of our diplomats, be they career diplomats or not, except for one or two, are competent to tackle this issue in the manner it has to be undertaken. One has to engage the community in a constructive way, something that is tough but doable, so that their incorrect presentation of the ground situation can be EFFECTIVELY countered. We do not have any who can take on the press and face the tough questions with alacrity and zeal instead of defensive mumbling.

Using Bell Pottinger at enormous fee is another failed project of incompetents, who could have actually engaged a skilled home team, who are the public relations vanguard who go for example to London a week prior to the President’s visit to set the media stage and garner enough counter arguments to the vitriol that currently flourishes. Sadly some of the pathetic actions of the Government in its dealings with her own people make it difficult to defend the indefensible, so we must first educate the leaders that they bear a measure of responsibility for this view. “The no smoke without fire syndrome” has turned into a raging inferno.

We must engage each Government where there is a significant presence of such detractors, with the facts at home but with support from the relevant embassy in SL of that country to corroborate the true state of play. A significant push has also to be made to the media, to counter the misinformation that is being spread, much by people who have never even been to SL, as I personally know that foreign born Tamils have a particularly jaundiced view of the facts, which have changed dramatically once they visit SL and find that Colombo is fully of wealthy Tamils.

If the current trend is unchecked the media misinformation will mushroom into a size that will affect the prestige of SL in the outside world, which cannot be supported by India and China alone. The pariah status will then affect all parts of the economy from consumers, investors, tourism and to other forms of economic progress. The smug attitude of the current leadership has got to change as it is the future that will suffer while today’s lot are six feet under and not have to face it.

A five pronged approach with a pincer movement working together concurrently must be started, one country at a time to neutralize Diaspora, media, governments, public opinion, and perception of local missions, but backed up by facts. The latter to be addressed first, without which the former cannot be convincingly conquered.

Thursday, December 2, 2010

The cancellation of the President’s address to the Oxford Union

An invitation was extended to the President to speak at the Oxford Union and was graciously accepted. There was much hoopla in the local press that it was the first time a sitting Head of State would speak twice at the venue in its entire history.
On the eve of the event, it was cancelled, with the President’s Secretary citing pro LTTE groups who had pressured the cancellation, while the Oxford Union cited security concerns having had discussions with the Thames Valley Police who were charged with the security of the visiting Head of State.

Whatever reason is correct, it is definitely a slap in the face for the President, despite any spin that is being put out for public consumption. In my opinion it was a pit of his own making, that resulted in this embarrassment. He should never have accepted the invitation unless he was given assurances in advance of the adequate security, and non-cancellation due to pro LTTE pressure.

Having lived in the UK for 18 years, I would have advised him not to have accepted as I know that the Diaspora, have certainly prejudiced public opinion, and our counter points have been too little too late to effectively negate this view. It is futile therefore to attempt damage control, until positive political moves are made to address the grievances, which have been promised, but not yet even proposed.

This act of failed diplomacy must surely rest with the Ministry of External Affaires which has patently failed to advise Head of State of the nuances of British thinking, possibly because of the lack of understanding of our representatives in the United Kingdom. If however they had advised against it and was overturned by the President, due to vanity or some other personal agenda, then it is him who should shoulder the blame and shame. Sadly his visit will not therefore be remembered for the positive steps taken to build a dialogue with the new Conservative coalition government, but for this date with infamy. Such are the pitfalls of a lack of clear direction in the conduct of foreign policy.

If there is a lesson we can learn from this, it is to clearly understand the lay of the playing field prior to starting the game. A thorough debrief of the saga is warranted so that in future such 'faux pas' are avoided, and eventually it is the nation that looks silly and it is in our interests that our representatives act with care and preparation. I wish we had our version of ‘wikileaks’ to this event to better understand the diplomatic communication between London and Colombo to give an opinion on the events that led up to this. This time the Country lost and we better accept it for what it is worth without saving face and sweeping under the carpet.

Thursday, November 25, 2010

Repairing a tarnished image- How to re-engage the International Community

Sri Lanka must play a more proactive and deliberately non-partisan approach to gaining the moral high ground in its relationship with its major trading partners, and those that are targeted for tourism promotion. While a consistent strategy is needed for global consumption, there is a dire need to look at individual countries and approach them with a plan that applies to that country or if it is the UN, EU, security or a trading bloc then a specific approach tailored to their unique needs.

In order to achieve growth targets, which are of benefit to all in the country, the perception of Sri Lanka in all the countries that matter also need to be raised. It is not sufficient to maintain that China and India offer all the development assistance required, and therefore shut off all previous partners. We must not be blind to the laws of geopolitics, where all nations that we have dealings with have an agenda, and we must be aware of this and play a tune that benefits Sri Lanka, not into the hands of one or the other, by believing their generosity as being selfless.

Our hostility especially expressed at home to the gallery, but no doubt transmitted via the embassies accredited to Colombo, by elected politicians and the implication that all in opposition are Western Stooges or funded by Imperialists, must stop immediately to have a genuinely open discourse of approaching the objectives.

There are domestic disagreements that a thriving democracy has, which must be allowed to be aired internally without fear of retribution. Then our international relations can sideline internal issues and deal with one voice to correct common misconceptions and get back to pragmatic diplomacy of a mature nation. It is regretful that the opposition has to resort to airing our dirty linen in the international arena, but to avoid this, parliament should permit more discourse of grievances and not literally steamroll divergent views, as is done at present.

If this is the case INGO’s can be engaged in presenting the facts, the Diaspora can be infiltrated to correct lies that are being spread, Foreign Governments can be constantly informed of the progress in areas like demining, resettlement and livelihood upliftment of displaced persons, and the foreign media asked to be more balanced in their reporting of issues. This will then make strides in countering the false propaganda spread by anti State elements, especially by the die hard LTTE sympathizers still bent on influencing their host countries to take a negative stance.

Finally, a proactive stance of encouraging and hosting important delegations of visitors, tourists and journalists to show them what Sri Lanka is really about will work wonders at changing the current landscape and seascape of this paradise.

Wednesday, November 24, 2010

Infrastructure for Development – What is it that is really needed?


I am sick of hearing the good deeds being spouted about how everything is being done to accelerate development, especially with the ambitious goal of telescoping 40 years growth to the 10 years. While outwardly, roads, rails, power generation and water supply are the obvious basic infrastructure needed, the most important ingredient is being conveniently forgotten, “a properly skilled workforce”. Much is being stated about our level of education, but the reality is very different.

Unlike in any other comparable study, Sri Lanka has a unique distinction of exporting her most valuable commodity, namely a well educated, English speaking workforce who have skills that are needed at home for growth but are also demanded by the developed countries. They are Scientists, Doctors, Accountants, Engineers, Hoteliers and Managers. This flight of talent, educated in Sri Lanka, many at high cost to the State is a severe impediment to growth. While trying to attract them back requires enormous costs, it is better to replace them with home grown talent that will find it harder to emigrate due to less lucrative opportunities.

How do we fast forward their replacement? We have a workforce with the necessary intelligence, but we do not have educational establishments that are harnessing them to ready them for the skills required. The State University system has been an abject failure except in exceptional cases like the IT department of the University of Moratuwa and SLIIT and there is no clear vision of how the private sector can help in producing the needed talent.

One does not need a budget to put the necessary resources, but the budget was clearly lacking in the emphasis to get this up and running. Ports and Airports have a cache for personal aggrandizement, but good centers of learning need to be beefed up. Round the corner from my farm is a huge technical college, which can be used to harness some of the talent, but getting good teachers and proper equipment and courses does not earn votes for people or line anyone’s pockets. It is the cheapest thing to do that can reap rewards, but is not being done. I wanted to follow some vocational course myself and found even the automotive engineering course woefully inadequate to train good mechanics, something we need desperately in this era of ever increasing motor vehicles.

How is it that the needs of the day are so obvious, the skills shortage so apparent but no one is able to take up the challenge to plug this gap? It requires little funding most of which is available as foreign aid if really necessary, and that is INVESTMENT in the future. "KALPANAKARANNA" that is the need of the day.

A general opinion of the budget, especially as it relates to the rural areas


The pomposity of the presentation, and subsequent smug analyses by the leaders who delivered and the bureaucrats who drafted this development oriented budget knows no bounds. I was an eyewitness to the Treasury Secretary’s own words last afternoon at a well attended seminar of business leaders, where he said it is now 70% over to the private sector to take on board the complete giveaway to them to make it work. In my opinion even the UNP could not have come up with a more capitalist style of free for all budget where the goodies were almost exclusively to the wealthy who already have a tax regime that is probably the most regressive in the world. (the poor share a grossly disproportionate share of the tax burden)

It was unfortunate for an opposition spokesman (an economist with a doctorate no less) to harp on the fact that the stock market indices fell as a consequence. The market’s behavior bears no relation to the budget as all the proposals had already been discounted, the stock market actually being technically far ahead of the game.
What he failed to state was that the majority of the country in the short term will at best see no benefit, and at worse suffer a fall in the standard of living, until the supposed private sector is able to pull the rabbit out of the hat now and perform to expectations, which in the end game will provide high paid jobs, and through it the expected increase in GDP per head of US$4000 by 2016.

It is ironic that the majority of the people, dare I say 99% of those who voted for this government will be worse off in 2011 in terms of purchasing power. The sad thing is they have no clue of this, as they don’t understand the budget. The press has no spine to tell them the truth, for fear of losing patronage and finally the promises made to get elected have been broken, further fooling the electorate.
Reduction of VAT, reduction of Income and Corporate Tax is all for the better off, while the taxes on items like alcohol, cigarettes, potato, sugar, onions, and flour and canned fish to name but a few that comprises a greater share of government revenue that do not even get a mention in the budget, hit the poor and is 100% collectable as it is taxed at point of production or import.

The complete dominance of the Government in parliament, now with a further number of cross-overs, who have duped the electorate who voted them, being further disenfranchised, there is no fear in lying and getting away. The government is free to govern at will for 6 years, hoping that by the end of it their stance would have proven correct. I agree that by the laws of nature, everyone will be better off by then, given our resilience and entrepreneurial ability.

The issue that I am attempting to give credence to is that if the objective is to be fair by the population, and provide some equitable sharing of the pain and gain, then this is not the right way to go about it. Further, I also have my doubts about whether the US$4000 will be achieved in this manner, as I know the maths does not add up here either.

The one thing that is electoral dynamite that the government has not had the courage to tamper is the paddy fertilizer subsidy. On the other hand I feel as written in detail in my agricultural blogs, this is one that should have been completely restructured to achieve the productivity improvements in agriculture that are essential to achieve double digit growth targets. The subsidy I have contended is keeping people in perpetual poverty, not allowing them to be mobile enough to take advantage of the opportunities in the growing economy, which only a mobile labor force can provide.

This budget for all its fanfare is revenue neutral, in that the tax reductions will not mean any loss of income to the government, due to profit growth and income growth, so it was easy to be showy and seem magnanimous. The government has not done anything to make the structural changes needed for growth. The comfort zone of public employment and jobs for the boys has not been tampered with. The inclusion of the tax net to public servants will not affect more than a few hundred at best. This is due to the wage structure at which PAYE tax kicks in.
The most important structural change that must be made is to make bureaucracy less attractive. The government pension at 55 is a huge draw for the skilled workforce, primarily the graduates to leave good productive private sector jobs, and join the govt. service, once their name on the waiting list is called up. I know of so many employers who have spent millions training their staff, only to leave without even a week’s notice, when they are called up for a public sector opening based on their place in the waiting list or worse, political patronage. The budget has made a start in the private sector pension arrangements, and also for self employed to contribute to a pension scheme, but with the acute shortage of workers in Sri Lanka, especially the competent ones, if we are to see an increase in GDP these people have to be released from the Public sector, willfully unemployed sector and agricultural sector as otherwise we will have to import labor.

So instead of wasting time crowing about what a business friendly budget we got, what we need is a real plan to get the trained workers for the businesses if we are to grow. Every business I know is now complaining not only about bureaucracy, but the severe lack of skilled people to grow. No amount of tax cuts will help!!!

Sunday, November 21, 2010

An “unscheduled” holiday declared on account of an event can result in misery


I have to supplement my meager earnings in agriculture with work in an office in Colombo, which I had hoped would subsidize some of the shortfall. I get paid only for the days I work, and had the ignominy of having a day’s pay docked off because I had to attend two meetings, one with the head of some of the largest publicly held companies in Sri Lanka, and the other the chairman of one of the largest privately held companies, on account of trying to promote an agribusiness which will help the poorest sections of the farming communities in the Moneragala and Ampara districts. Their was little if any financial benefit for me on this, and was acting more as an introducer of the parties as both the esteemed gentlemen are known to me.

It was regretful when Friday, 19th of November was declared a holiday with barely a week’s notice, and despite the Government’s request that it be paid. That would not be the case for a daily paid person like me. This in addition to Wednesday’s Haj holiday, which was known in advance. It is in circumstances like this where monthly expenses do not fall on account of holidays, but income does, that actions of others affect us directly.

In no other country on the face of the earth, and certainly not in India which is our closest neighbor, that events such as the simple oath taking of a head of state in front of the chief justice, causes so much destruction, and inconvenience to people’s lives. If one were to take the proceedings of that day in toto, it certainly did not warrant the forcible closure of establishments, be they private or public or schools for that matter as it was technically a very short ceremony extended to include three languages, and justify the huge expense of the temporary construction and the attendees time and presence, most of whom would have done it out of duty rather than willingness.

To appreciate this inconvenience one has to work in the area, as my offices are at the World Trade Center and I take the bus, so the road blocks over days and the traffic jams take their toll in productivity and stress, especially as this is the third time this year that life was so disrupted, firstly for Independence, then for the Victory Parade and now for this. The rehearsals etc add to at least 12 days of inconvenience.

The vast schism between the public and private sector on this issue is apparently obvious, as most people making such decisions are blissfully ignorant as to how the economy and engines of growth of an economy operate. They are in the public sector and this is just a part of their daily routine; economic productivity being something alien at the time of writing, which I can only wish will change with enlightened leadership. Knowing many of the establishments that operate out of the World Trade Center, I can assuredly surmise that their contribution to the GNP of this country, per employee is about 50 times the national average per head. To put it in understandable English that would have exceeded the sum of all those who were seated in the temporary construction at the Presidential Secretariat that morning, who supposedly believe they are the VIPs of the nation.

We must therefore think (kalpanakaranna) before we make decisions that affect the lives of others especially when it relates to the brakes on development of this country

The long absence or call it break and brake from blogging

I am back in the land of the blogs after a long absence and I must confess to being ambivalent as to whether this has been a good thing or not. It is the forced holiday on Friday the 19th (unpaid for me despite the government requesting the private sector to grant a paid one) as I have a work place in Colombo 1, and the wet and blustery days of the weekend that forced me indoors that finally gave me the time and dare I say it desire to pen a few thoughts!!!

These few months where I have neither checked my blogs or that of any of the others for that matter, has been a time of thinking. (kalpanakarana kalaya) It was a time to gather my thoughts which I did not have to share with anyone, but most of all about the treadmill I had climbed onto most unintentionally. It was this activity with no break except to eat and sleep that made me wonder if it was worth my sharing all the events of my life with strangers, and if I did then was it something anyone else was interested in anyway, as most people read a blog for education, entertainment and to get another opinion of a particularly hot topic.

I have yet to check my blogs for comments to find if people have missed my missives or not, and I am sure few really care. The comments made if any do not go to my email so I am none the wiser.

On reflection there have been so many things I have done lately, which have surprised me and come to think of it each day has been a story worth relating due to the unexpected and interesting events that have unfolded.

The variety of my work and the different people I have met, and the unexpected that have befallen me these months, sometimes make me wonder if I am living a dream or a nightmare!

Anyway, I am in one piece still cobbling together a life, none the worse for wear and still in relatively good spirits and health, with optimism and hope intact, despite a litany of woes.

I must go back into the blogs I used to follow to see if I have missed some truly interesting posts. I also wonder if after this long absence if my entry gets into the likes of ‘kottu’ to get a chance of being picked up, but we shall see wont we! My faceless and nameless friends I am sorry for the silence. It was unintended and it just so happened due to circumstances. I have just had to work that much harder these past few months.

Tuesday, June 1, 2010

The Reduction in the Import Duties, especially on vehicles

A reduction in various import duties has been announced. As usual there has been no honest explanation of why. While this reduction has been predicted for over 6 months now amongst the circle of people in the know, as one can see certain shares had gone up a while ago in anticipation of this announcement, it nevertheless needs to be looked at impartially from the current street talk of the cocktail circuit.

There is no argument that in 2009, the revenue collected from Car duties dropped dramatically, as only those with public servant permits, and politico permits brought in new vehicles duty free. In a calculated move to turn this around it was decided that this move will increase revenue with the pent up demand for vehicles which the revised prices will satisfy. It is probable that at most there will be about Rs25B in the next 12month period in taxes which will help reduce the deficit.

The expected revenue is still only a guess. There is some dispute at the moment of writing about whether this is across the board or on a restriction on the cc capacity. Any restriction will only reduce the sums raised. As so little taxes are raised from the wealthy, who rarely pay income taxes in Sri Lanka, the car duties were the only way they ever paid taxes, so this was thought by the policy makers as a progressive tax on the rich, who will be the purchases of cars. So that is the economic rationale.

Further this is a way of releasing idling black money, to cars, and indirectly back to the treasury by way of taxes, as policy planners are racking their brains as to how to get hold of the billions that people have stashed under their pillows,FDs or bank accounts, back into the government to reduce the deficit and spur growth.

On the grounds of public policy, the benefits are arguable, as there are many things that are required prior to any increase in vehicular traffic on the roads. It is of the utmost importance to improve the condition of the existing roads, which take a huge toll on the cars, where tires and spares, most of which are imported need to be replaced at a huge import cost due to the fault of the administration. The public transport system needs to be hugely improved to persuade more people to use this, reducing the pressure on the road system, in terms of traffic and commute times, both of which are huge costs to the economy. If the taxes collected are put to this use then it is a win win situation, where there will be a net benefit to the economy.

There will be an inevitable reduction in second hand vehicle prices in the local markets, which will also help those who are middle class to purchase a vehicle, and a flood of small cars for these contributors to the national economy, is an encouragement for them to remain in Sri Lanka, rather than emigrating!!!

Tuesday, May 25, 2010

The unsurprising allure of jobs in the State Sector and Overseas

The recent headlines of the fact that the vast majority of those questioned in the 15 to 29 age group, would overwhelmingly prefer a state sector job, and given a chance would opt for a job overseas, is not at all a surprising.

We must first understand why this is, and if the intention is to attract new job seekers to go for a private sector job, their virtue as compared with the state sector has to be evidenced by fact, and not mere innuendo.

As far back as a hundred years ago this was true, and people like one of my grandfathers from a poor family from Moratuwa, was able to marry an heiress, because he was a Civil Servant, who was on a trajectory to the top. To be fair he was one of Sri Lanka’s elite in academics and got his job on merit. Educated people in Civil Service were in big demand as husbands for wealthy families who were prepared to part with huge dowries to give their daughter in marriage. This ingrained culture has not subsided, and security of position, and pensionable at 55 are incredibly attractive reasons for preferring the state sector. If we are to change this, then we need to address the reasons. We must make the state sector less attractive or the private sector more attractive, in order to change this opinion. As for the allure of leaving the country there is little we can do to match the ambitious young person’s belief that they can only get ahead outside these shores.

Taking the point of making the private sector more attractive, if we are to increase the remuneration and benefits, it cannot be done without a commensurate increase in productivity as otherwise these companies could not survive.

The answer may lie in reducing some of the perks offered to government servants, such as tax free salaries and duty free cars. It is most absurd to offer govt doctors who also have thriving private practices, duty free cars, tax free salaries and who benefit from a totally free tertiary education. Similarly under stretched government servants are engaged in private work and businesses while working in the state sector using these resources to carry out other jobs. The propensity of state sector workers to also be involved in soliciting bribes for small favors which are part of their duties does not help. It is said that in Singapore state sector employees are paid salaries comparable to private industry, they are expected to be completely beyond reproach with no compromise on graft or inefficiency. In this sense they earn this higher salary. In Singapore’s case it is the private sector that determines the pay scales which the state attempts to match in order to attract the same caliber of person to run the various state entities.

In Sri Lanka, in contrast, the high rewards are set by the state sector in the first place, and the private sector finds it hard to compete with it. Often the competence of the state sector is questionable as some jobs are handed as political favors. So lets cut the duty free cars, get rid of the dead weight, make the state institutions more accountable and performance driven, and completely ban private work during working hours, with doctors still permitted to practice out of their work schedules as long as they do not clash with the priority being their state sector job.

Market forces should determine income levels, and not arbitrary scales that bear no relationship to competence or performance, rather merely to longevity and seniority. With regard to the complete imbalance of pay scales in the security forces, the standards should be raised so that educated, competent and career minded people are chosen, in place of anyone fitting the basics as is done now.

Another more important psychological fact is the entrepreneurial spirit should be encouraged and promoted at school. This ‘can do’ mentality will direct those away from the state sector. This is expecting the impossible as the teachers are state sector and their bias is naturally shown to their pupils. Most students have parents who are worse off than the teachers, so naturally they will aspire to be like a teacher, a secure job that is seemingly well paying, where they clock off at 1.30pm. Who wants to farm land into the night for no security? As a generalization, as private school parents are in higher income levels than teachers, their children are less likely to want to be teachers, so therein lies the contrast.

In investigating the allure of overseas jobs, there are enough reasons why this is preferred as the income levels expected are far ahead of what is available locally, and until this difference is bridged, by economic growth within the Island this magnet will still pull. It is of course a matter of time when this will be redressed and it is not worth placing too much credence here except in educating people on the differences of cost of living, and income levels, as well as savings rates of overseas jobs and some of the harsh realities associated with such migration.

In my opinion, the state sector allure is one that will stay as long as there is a class distinction, where some may believe that lucrative jobs are available to those with connections and not merit, and at least secure state sector jobs can be achieved without such. Therefore in my experience all those in lower paying private sector who have also applied for state sector employment, will take the latter when it is offered them, sometimes after years on the waiting list. This will change once the mindset changes, and some of the attractions of the state sector are reduced with the expected hiring freezes and cost cutting envisaged for deficit reduction.

Sunday, May 23, 2010

Turning "words" into "deeds"

Our media is so full of plans for here there and everywhere. However the reality is just so far off their commencement, let alone fulfillment. If only 10% of the ideas and plans are implemented we will notice change. While it is not specifically the fault of the leadership who should be credited for at least coming up with the ideas for improvement, the bureaucrats who are tasked with implementing are so resistant to doing any more work than they are used to. We have to now get to that level of state sector officer and impress on them their stake in development and hold them accountable too for progress in implementation.

One is so full of anecdotes these days, as there are so many business people who are very enthusiastic to get a project started, and when they leave the office of the Minister are so glad that he is also on their side, trying his utmost to help them start their project as soon as possible. Then when it comes to meeting the Ministry officials to get all the permits and permission and go through the red tape, they are just stubborn, slow, and corrupt. If the principals rat on this to the Ministers, then these bureaucrats become even more defiant refusing to perform the necessary tasks. The Investor or entrepreneur is at a loss, as to how to proceed and in most cases gets disgusted and gives up.

The leaders have the power to cut to the chase and strangle the miscreants, and if some heads roll, others will get the message. This is an example of the arms of government being the resistance and the sooner there is less government the better it would be for growth. An overweight bureaucracy is so stifling, that we ought to make this the case for their retrenchment; namely that they are a severe obstacle.
Once the impediments to Implementation are cleared, then the tasks should be delegated and followed up by those with the appropriate skills, and the Minister to be held ultimately responsible for completion, who will only be permitted to take credit once it is completed on time. It would be nice if there are completion dates assigned to these tasks by which progress can be measured.

I am upbeat that given a good plan of action, we will be able to achieve some of the objectives that are being set. A culture of accountability, pride in performance and completion, along with incentives for early fulfillment will accelerate these plans. The inclusion of all the stakeholders into the action plan will help to give ownership of the project to all parties, so that the eventual product will be appreciated, and maintained, something which is absent when stakeholders are not involved in the implementation, and who therefore don’t have pride in ownership.

Saturday, May 22, 2010

has anybody noticed how much time ministers and their respective ministry secretaries spend at meerings with the President?

I find it absurd that the ministers and their Ministry Secretaries are constantly summoned to Temple Trees or the Presidential Secretariat at the behest of the President in addition to their duties in Parliament. It is known that the President loves a gathering and his office which is always seen in photos, is full of people as he likes all the Ministers to be present, so that decisions can be taken or rather edicts handed down. This style of management while having its pluses should not be abused in the interests of productivity, as the Ministers now have an excuse as to why they were unable to perform their duties.

Is it any wonder that the bureaucracy does not achieve much as the precedent set is not a good one to ensure productivity? In this electronic age, there are more effective means of communication that can achieve the same objective and I trust this can be pointed out in the interests of the Nation. The seat of Government is in Kotte, and President operates in Colombo, and so the added commute time and the wait for the meetings are all productive hours that are wasted.

The lack of a disaster Master Plan was evident when the President had to summon so many Ministers and departmental heads to discuss the crisis and find solutions. A Master Plan if there was one would have automatically kicked in if this sort of emergency arose, and the need for these officials to waste their time when their services were in dire need elsewhere is evidence enough that the government is very poorly organized to handle anything, not having a plan for any event.

Time Management and Productivity evaluation are critical functions which need to be looked into, and any action that is detrimental to this should be removed or reduced, even if it means gently explaining to the Boss that his style of management needs some updating in the interests of performance, which he expects from his subordinates.

Unfortunately as every one’s job is at the sole discretion of the President, no one dare confront him on this, and he may actually be totally oblivious to the cost of his actions on others. If government is by dictated by fear, then no positive outcome can arise on all the fronts that need tweaking and improvement. The fact that I have seen no observation by anyone in any place or blog means that in typical fashion, the efficiency of government is just considered to be a clash of semantics and not even addressed. I believe it is time it is addressed and pointed out as there are conscious efforts being made to improve all areas, and this is one I believe needs immediate attention.

Friday, May 21, 2010

“Deficits” lets not get too frightened by them, instead manipulate them wisely

Deficits are the words used to frighten governments to get their house in order and order harsh cuts in public expenditure in order to get in line, so international funds and borrowings with strings attached can be obtained to live another day!!

The US is running a wildly extravagant budget deficit, which was US$1.42trillion for year ended 30th Sept.2009 and expected to top US$1.6trillion the following year. So ours at US$7B pales in comparison as the US figure is 230 times ours and their population is just 15 times ours. The UK is also in crisis with painful cuts planned with increases in taxation and reduction in public expenditure. In the UK they are planning to increase the rates of Capital Gains tax so that there is no difference in rates from Income Tax. In Sri Lanka there is no Capital Gains Tax.

I am not advocating printing of money to buy consumer goods. I mean if the deficit funds long term development that results in a growth in productivity, it is well worth expending. While economists differ on the optimal level of deficits, that a country can sustain without hyper-inflation setting in, it is moot that in Sri Lanka of today, any of the rules of economics apply due to the special circumstances of a country recovering from a long war, where new vistas to economic development are opening up, which will clearly all result in direct increases to GDP.

This is why deficit financing of Northern Development should be undertaken, if it can provide employment to the resettled people, as it is better than just providing them a living allowance, when in fact they are making a direct contribution to the growth in infrastructure with little pressure on the Southern resources. Further the use of the security forces in the Northern development effort, will mean that their otherwise inflationary wages bill, is actually now being put to productive use in the economy as a whole, whilst they are also learning a construction trade into which they can eventually find productive employment once the skills are developed.

It is sad that the opposition is out of touch on the practical aspects of managing deficits, and are parroting textbook theories that somehow have no place in 2010 Sri Lanka. We have a unique set of circumstances which include massive foreign remittances recorded and not that form a huge portion of National Income, which has allowed Sri Lanka to defy all doomsday predictions and come out with an overvalued currency, with no balance of payments deficits permitting a lotus eating lifestyle that only makes work optional. A pragmatic finance team in Sri Lanka with the amiable Dr Amunugama having his input can wave the wand, if the rogues in power can be stopped from stealing the goose that lays the golden egg.

Thursday, May 20, 2010

What do you know? I just discovered the ruling classes are reading my blog!!

This blog is primarily devoted to common sense issues that come to my mind from my personal experiences, which I believe will help in improving the quality of life for the average Sri Lankan. I respect differences of opinion, as I don’t expect people to accept everything I write, but if they just think of what I have written and come up with another alternative based on my evaluation, then I have the satisfaction that I have commenced a dialogue that will hopefully lead to positive change and direction on an issue in question.

I believe that whatever we do in life should be for a purpose or motive that leads to a net benefit to society. It is in that vein that I have taken advantage of the blogosphere to express my views and opine on topics that are of interest to me, and comment on observations that I find interesting which may spur discussion and an eventual shift in action, policy, thought or direction.

It is therefore heartening that a government looking hard at solutions to intractable problems, has a source they can refer to when they want to know what is wrong? What can be done to solve them? With a source they need not credit and gain brownies for someone else’s effort. My agenda is transparent, I don’t represent any particular interest group except mine personally, and I am fairly critical of the legislators, so no one needs to admit reading this blog, let alone cribbing ideas and suggestions from it.

So guys and ladies, recommend the blog to your colleagues if they want some genuine unsolicited advice as sometimes in your ivory towers with sycophants all around you, it is hard to see the wood from the trees.

Remember that many people who give advice live a life far removed from the people whose lives they are trying to affect by actions and policies and at least reading some of my stuff, you know that this is from one who experiences some of the problems on a daily basis at first hand and writes about it, something few people can at my end of the spectrum do to be heard.

Mayor of Colombo if you read this (sorry I forgot Colombo does not even have a Mayor!!!)…. “the roads are not constructed properly, and the water does not drain into sink holes, but remain in puddles on the side, when I walk on the pavement, I get drenched by the spray of vehicles driving into the puddles, even though I try to be as far from the road as possible. None of the elected officials walk, so they will be unaware of this problem. I perform a green service to the environment by walking, you can help us walk, without hindrance, and help the environment.”

Living in unauthorized places – a possible resolution to an age old problem - a current topic due to the flooding related displacements

There are many people who live on land illegally, some of whom have deeds that are fraudulent but they don’t realize they are fraudulent as lawyers have provided them with false deeds. People live and squat on land that are usually parts of river, canal, sea, road or tank reservations, and therefore do not have legitimate deeds. The Govts. over the years have ignored this, as no one wants to incur the wrath of these people, who will either ask to be re-housed or be provided with alternative accommodation. As elections loom, they are even given water and electricity, in return for a vote. We in Sri Lanka have a ridiculous system where electricity and water services are supplied to unauthorized and illegal constructions, like my neighbors who live on a river reservation in Polonnaruwa, while I don’t have and find difficult to get electricity to my property, which I lawfully occupy.

This issue is timely due to the recent floods. Many people living on such lands have suddenly lost their homes to the raging waters, and are seeking help to be re-housed, or have their homes rebuilt. It is simply nonsensical to have them rebuilt in the same location, as a reservation is made just for this occasion in case of flood, and accordingly should not be occupied. In many cases people have lived for generations and are loathe to move. When the Tsunami struck, many people were re-housed inland elsewhere in homes built for them. They then rented out those homes, and moved back into temporary homes built in the very places where their homes washed away. Look at the line of homes in the Moratuwa, Koralwella area for example. It is because they prefer to live in an area they have known and where their business, legitimate or not is conducted from, or for other reasons.

Further in the case of Colombo, cost of land is so outrageous that squatting is the only option if they are to live in a place close to employment as renting a place is out of the question on their incomes. Building of housing schemes to provide shelter for these people is fraught with political interference, as influence is also used to get housing due to the demand for such accommodation. There is no guarantee that alternative land or housing will be permanent due to the misuse of anything that is free, and all they will do is rent the housing they receive and go back to the same place where they were evicted from.

I suggest that using the electoral rolls, and electricity board information, some idea of the longevity of these tenancies is first established. Then a temporary monthly stipend be given them who have established that though illegal they have occupied a location for a considerable period of time usually in excess of 5 years. This is as a measure for them to find alternative accommodation of their choice, in areas of their choosing or the provision of state housing in areas that the state chooses, where they agree to inhabit, or lose if vacated. This grant can be a monthly one for say 6 months, and the state housing is an alternative, and not in addition.

This same scheme should also be applied to shanty dwellers who sometimes occupy state lands or squat on private lands, where private landowners are also fighting battles to get eviction orders on them. The intractable problem of people wanting to live near the homes they previously occupied as they consider the area their neighborhood, is one that is not easily solved, especially in land scarce Colombo. Furthermore giving free land to squatters is a license to encourage squatting and not discourage it.

We now come to the enforcement and prevention of illegal occupation, which is part of the state responsibility of policing all these reservation lands to ensure that no unauthorized construction takes place on such lands. If this is not done with regular frequency, someone else would just take the place of the evictee, and one is no nearer a solution to this issue.

One must also remember anything given free is unappreciated, and in many instances, land obtained freely is sold and the money spent, and people claim landlessness and lay claim to further areas by squatting yet again. Whether landlessness is either out of choice or circumstance is hard to determine, and the answer lies in assistance with housing, and not a complete subsidy. Thus given a stake in a property that is subsidized, one is more reluctant to sell or abandon, such a place, and accordingly is more likely to live and develop this property.

Poverty is a very cruel fate, and while not wishing to be harsh on those most disadvantaged in a community, one has to have an enlightened plan of providing living accommodation that permits labor mobility to areas of employment as well as security of ownership. How one reaches this delicate balance can be by providing rental accommodation to families at a reasonably subsidized rent, which nevertheless requires the tenant to contribute a portion that gives the tenant certain rights of security, which also goes along with adhering to conditions.

Highlighting the current predicament is an occasion from which to begin assessing the problem of unauthorized living, and alternative accommodation can then be offered with strings to asses the take up rate, making quite clear that squatting is not an option. The Disaster Management Ministry should work closely with the Housing and Construction Ministry to find suitable alternative accommodation, none of which should be provided without some sort of cost sharing.

Wednesday, May 19, 2010

Remembrance & Commemoration of end of hostilities – May 19th 2010 a good day to start a Decade of Peaceful Development in honor of the sacrifice

It is a year since the LTTE was militarily defeated, that ended 30+ years of bloodshed. As it was an internal conflict all the casualties were Sri Lankan Citizens and whatever the death toll varying from 100,000 to 260,000 on all sides both combatants and non-combatants it was a heavy price to pay. The injured and disabled will carry the scars to the end of their days, the parents, spouses and children will carry bereavement for that long too. The relatives of the missing will similarly suffer, not knowing the fate of their loved ones. There really is no end to the suffering of these people, and it is the degree to which each of us individually copes with that memory that will define our future peace of mind. WE DO NOT WANT A REPEAT either for ourselves or for our children of this legacy.

The displaced have had to re build their lives, with over 1.5Million having permanently settled outside these shores during this period, and a further number awaiting to go back to their former homes, from refugee camps in India or within, known as IDPs. There is an immense amount of work still to be done for these people, and as assistance is slow to come from overseas as promised, the GOSL(government of Sri Lanka) must do what is necessary to perform this duty. There are huge swathes of land that require be cleared of mines, prior to settlement and homes and livelihoods have to rebuilt from scratch. It is no easy task and will take years and cost a large amount.

The progress in the last 12 months has been painfully slow, even though the govt. will point to the number of people no longer in the IDP camps. That’s just it they are no longer in camps, but do they have lives? It is a question of getting the infrastructure basics in order so that they can make a start. The elections, first the provincial that dragged on from 2008 all the way to the end of 2009, then the Presidential in early 2010 and then finally the General Elections this last April took all the energy of the government and the bureaucracy from the issues at hand and are mercifully over, and so we celebrate the first anniversary of a colossal waste of resources in fighting elections, a sum that has cost the country more than the cost of resettlement of the IDPs. Not one of the elections was fought on a specific agenda, but on the record of wiping out terror. So we have no idea what to expect as nothing has been promised, except that we would have a GNP per capita of $4000 in 4 years.

There is nothing we can now do about the wasted year, but we can surely make up for it by speeding up and doubling up on the work that is needed to be done urgently. So lets let us use this anniversary to give thanks to all those who made it possible for us to start with a terror free state, and with an expected lifting of the state of emergency, we can truly be free to begin a new decade of growth, backed by the rule of law and independence of the judiciary, so that we are free from fear.

It is an opportunity to gather all the resources including international goodwill to lay the foundation of a decade of growth, which should easily see a tripling of real GNP per capita. There is no excuse for a country of this size with a huge human resource potential that is not tapped, to take off productively under good management and governance, which could remove the obstacles to development, bearing in mind the immense resources we have.

More specifically, removal of archaic barriers and outdated land ownership rules for land will release agricultural land for increased mechanized and productive agricultural methods. Unreasonable labor laws with regard to termination of employees will ensure more ready hiring of staff on permanent payroll, which is currently not being done due to these barriers to employment. Giving the same benefits that are given to BOI companies, to all companies that are investing in growing their businesses will help local companies to grow their employment base, currently given to new investment primarily from tax concessions only given to these foreign dominated FDI’s foreign direct investments.

The most important barrier to growth in Sri Lanka is the stifling bureaucracy which discourages anyone from investing, especially the delay and procrastination on the part of the government departments, who do not see the economic benefits of speeding up investment, as their culture is one of graft and slowing down authorizations in order to justify their existence.

Let us take this unique opportunity to put Sri Lanka on the map and not just talk about it as the politicians are good at, and instead act on all the words. We must walk the talk, as none of the ideas that are expounded, ever come to fruition.
Lets not forget the private sector is the real engine of growth, and their path needs to be smoothed over, and the government’s responsibility should not be to compete with them, but to prepare the groundwork in infrastructure to oil the wheels that turn, so as to make the ride more smooth, and if that is done more wheels will want to ride the roads and railways, which is the objective in order to achieve the growth targets.

It is a good sign that captains of industry have been appointed to head state boards, but they should also be given the powers to exercise direction without hindrance to stamp their seal, and their performance constantly evaluated. If India can grow at 10% why cant we get 15%, 7% is just not good enough.

Thursday, May 13, 2010

A holistic approach to governance is required and not a buckshot one

The new administration in Sri Lanka has an electoral mandate, despite the low voter turnout to set about policies in place to achieve its goals, which is hoped to achieve a GNP per capita of US$4,000 in five years from the estimated US$2,000 currently. There are severe structural changes to the economy that are required, and the government has the legislative power to enact laws to achieve these changes.

It is a once in a lifetime’s opportunity afforded this administration, to do the needful if we are truly to reach the targets set, but all sections of government and the private sector have to work with a common purpose, with no passing of the buck anymore, if we fail to achieve this objective.

Taking the example of the Ceylon Petroleum Corporation as a case study in how this approach has to be adopted in practice, we note that a new Chairman in the guise of Mr Harry Jayawardene has been appointed. Whilst on the face of it, this may seem a strange appointment, to appoint a Business Tycoon to this position, on the other hand it may be the right choice as a person with the competence to affect the real changes that are required. One must also note that he was a onetime Chairman of Sri Lankan Airlines, so is no stranger to head a Public Enterprise.

Added to this his immediate boss is the new Minister of Petroleum Resources, Mr Susil Premajayanth a respected politician with clean hands, being given a very important job to weed out any existing corrupt practices and clean up a Ministry which was notorious as a hotbed of graft. These two people have an unenviable job ahead, and could define the direction of this government if left to do a good job without interference. I will address some of the immediate issues that are required to achieve this goal. The Rs55B owed to the CPC by the CEB(Electricity Board for fuel supplies) has to be resolved, if the losses of the CPC are to be seriously tackled. Either this debt should be taken up by the Treasury and CPC compensated or some decision needs to be taken, so that CPC can get back on a proper footing.

Then the inefficiencies within the CPC need to be tackled, like the gross over staffing and the 1000+ people on the payroll, due to political patronage, but who do not turn up to work, preventing this organization from returning to profitability as it should be a highly profitable entity with a potential profit before tax of about Rs5B per annum, taking into account the price of oil, selling prices, refinery capacity and infrastructure. Further the lack of arms length of the deal to sell the gas by-product of CPC to LAUGFS, needs to be corrected, so that a market rate can be established for a fairer price to CPC of this valuable product.

In doing this, the bad dream of the oil hedging scandal, which only Minister Premajayanth (the only minister including the President) understands and is briefed on, needs to be shunted out of its balance sheet and expunged. If the new Chairman is allowed to rationalize and modernize this behemoth, and the trade unions representing its overpaid employees are handled with tact and persuasion, I believe the massive turnaround of over Rs20B in profitability can be achieved, flowing into the treasury and would be a clear indication of the government’s serious intentions of cutting the fat, improving productivity, showing the IMF they are truly making headway, and will go a long way in instilling confidence.

In order therefore to succeed the whole machinery of government has to work on the same page, like pay their dues. For example, for the CEB to pay the CPC, they in turn need to be paid the bills by all the state institutions, security forces, ministries and the ministers themselves and their cohorts who have not paid their individual bills and have used their influence of position not to have their electricity terminated, unlike lesser mortals like us who have automatic termination if unpaid. That is what I mean by a holistic approach, as otherwise it is impossible to run any entity that is not allowed to function with true independence.

In doing so external government to government deals also need further investigation to ensure they too are arms length such as the oil deals with Iran, that are boasted of as being favorable, which in turn have shown to be most unfavorable to Sri Lanka in hindsight, and the extension of credit terms, when no one would give us credit, now seem to be outrageously expensive, bearing in mind the arms length bond issues that sovereign debt of Sri Lanka can now command.
While Sri Lanka is in an enviable position regarding its external financing, we should not squander this short term benefit, but instead use it to bring down the huge deficit on the government current account, used to finance recurring expenditure, if we are to tame the rising inflation, which in turn will lead to rising rates if spending is not curtailed. What better way to ensure this, than the turnaround of the loss making institutions into profit. Despite the expected tourist boom, the increasing losses of the twins of Sri Lankan Airlines and Mihin Air seem destined to drag us down further, unless the red ink stops flowing.

I have merely picked a small example, to show what is happening, and what needs to be done, and this if replicated across the arms of government, will reduce waste, reduce cost hopefully by reducing the amounts going into lining of the pockets, and thereby benefit the economy, as actions can now be performed not just with votes in mind, but real growth, which is the final legacy that is left for posterity.

Tuesday, May 4, 2010

Another Serendipitous outcome only to be revealed here

In Sri Lanka, and perhaps elsewhere many people on survival mode wear their lives on their shoulders and live quite dangerously and by the grace of the almighty having faith in the supreme being to take care of chances we take in life, more out of forced circumstances than by design.

Driving my broken down, rusty and quite the worse for wear pick up, I know I always live dangerously not out of choice but out of force of circumstance. (my detractors may beg to disagree, but that is from their armchairs!) I have to make tough choices and prioritize my expenses primarily for the must dos. There is a long list of wants and desires that can only be met if circumstances were different.

In this regard, when I spend over Rs20,000 on a set of tires in November last and discover less than 10,000km later, in April they have both completely lost their tread, what does one do? I know in this instance, when I requested CEAT FM tires and was given CEAT T2000 for the same price, saying they were equally good, I was completely misinformed. The FM tires, purchased at the same place gave me 25,000KM so it is a no brainer that the latter were inferior in every respect, and I was had by the unscrupulous dealer, the Tire Box on Malay Street as they were out of the FMs.

To cut a long story short, I had a puncture in a desolate stretch of road in Hanwella about 20 minutes away from home, on my drive back to base in Godagama, from Minneriya quite late at night as that is the time I can spare for driving. Fortunately I had a man Friday with me, and was not alone on this trip, as sometimes I drive back on my own with no helper.

When the jack, the original that came with the vehicle was set up, for want of an explanation with a fully loaded pickup it just gave way and buckled once fully outstretched. Fortunately we had the presence of mind to put back the punctured tire, so the full force of the fall did not depress the axle to the ground, as I had a premonition that a bent jack pre-warned a break which was what happened.

What does one do? Broken jack, stuck in the middle of the night, it looked like we were in for a whole night standing outside; sitting in the cab may have resulted in further weight that may depress the axle or result in the wheel also buckling.

When this ghastly proposition dawned on us both, a man seemingly from nowhere turned up and in passing, asked us what was wrong, and I flashed the flashlight at the broken buckled jack and showed him our unenviable situation. He then suggested I come with him up the road and that he knew of a garage, and would see if he could get a hydraulic jack to help us out. Fortunately there was a man in the garage, in the inside room asleep, he was a member of staff who also acted as the security due to vehicles in the garage requiring some guard. He was woken up and told by the good Samaritan, that he would act as the guarantor and to give me the jack and that I would return it once I had been able to change the wheel.

After some false starts we were able to use this jack to change the wheel and get back home in one piece breathing a sigh of relief that we were saved by a stroke of luck or divine intervention from a much more battered alternative.

We returned the jack having to wake him up again, and the offer of some money for the trouble was politely refused. I left my name and phone number with him to give to the good Samaritan who also appeared to be a traveler who went to far off places to buy produce for sale in other places.

What is the moral of this story? Is it that one should take no chances in life and play very safe? Going about minimally, staying in one place and making doubly sure that all bases and possibilities are covered. Maybe have comprehensive insurance and have a good roadworthy vehicle. Some even have backup vehicles when they go long distances so they are not stranded. Well these luxuries are for a select few and the other mortals live their lives the best they can as I believe I do.

One only lives on this earth a short time and is either full of life’s experiences or devoid of them. While I have had my fill of experiences, I still seem to want even more experiences at the pace of life I lead. My goal is of course to improve upon my current situation, and I am taking the necessary steps to do so, however there are circumstances that intervene that make this goal a little difficult to attain at present, and possibly some delay in achievement with the obstacles seemingly limitless. However when one compares ones life with others with seemingly much easier lives, and when one delves more deeply into their lives and find them far more troubled, one is thankful for the mercies one actually has and not the obstacles one is faced with.

It is true that it is not the achievements that count, but the path one treads in life’s experiences that determine character. It is difficult to divine this path exactly, but as long as the road is clearly marked ahead, and the pitfalls are avoided and the pot holes carefully trodden on, the eventual destination will seem worth the road traveled. We must never forget that we just cannot predict the next moment and being grateful it is not worse is fulfillment in itself, though we may not realize it at the time of occurrence.

Thursday, April 22, 2010

the inevitable move from brawn to brain



there is a greater shortage of people ready and willing to do heavy duty manual work, unlike in the past, and as this work is generally done by those unable to hold other types of steady and knowledge intensive employment, the numbers ready and willing is decreasing at an alarming rate. Jobs such as tree climbing, such as for coconut plucking are at a premium and it is not unusual for them to be earning in the region of Rs50K per month, however even at this rate there are no takers, and it has been suggested like in Kerala that we train monkeys to pluck the coconuts for us.

We as a country are still not ready to use mechanical means. One only has to go to the Dambulla and other wholesale food centers to see the manual workers carrying heavy loads some in excess of 80kg such as in perforated bags of Pumpkin. It is now harder to find these people to lug them at the per piece rate of Rs40 that is charged, nor are there any trolleys or forklift related mechanical means to assist in this regard.

It is important that our organizers and planners of these establishments design means to reduce this manual task forthwith if we are to be able to operate these establishments with maximum efficiency.

This thinking man's blog is one to motivate the gray cells in our thinkers to these inevitable changes if we are better able to cope with advances in the movement of goods and services and also improve on the serious productivity weaknesses. I see that there is absolutely no planning in this area at all and we still assume this labor will be available forever. We should not as is always the case wait for a crisis to occur before we change our procedures.


In other countries there are workman's compensation laws for injury that are strictly enforced along with ILO regulations in this regard. As most of the work is done by small scale operators that are not even incorporated, it is difficult to enforce laws on individual owners of small businesses who themselves take these risks. We must not let these struggling businesses be burdened with injury, and take the initiative of providing the needed relief. We can also harness the services of international organizations like the ones mentioned earlier to assist in this regard in a practical sense in providing ergonomic products for injury threatening work.

The important point to note that in my many many years in the West I cannot think of one instance where these kinds of weights have been carried by individuals on their backs, and why we continue with practices that have been done away with in these countries in over 50 years. Why are we lagging so far behind? It is because non of the law makers has ever carried a heavy sack of anything, and probably never did a hard, let alone manual day's work in their lives and are therefor not concerned at all for the welfare of their fellow man who they pretend to represent.

If you truly represent them, then do something soon to alleviate their suffering and improve their livelihood. No wonder the people drink, as they need more than 'dutch' courage to life such heavy loads, or climb such high trees without a harness or back up.

Wednesday, April 7, 2010

It is an extremely important General Election stupid!!! and not a beauty contest for preferences



It is a very sad time indeed in our Serendipitous Isle, for ‘Good Governance’ that we hold a General Election, where no one knows what the individual parties stand for, and which if truth be told, the Governing Alliance did not even bother to publish a manifesto, being confident that they will win.

The election therefore has been reduced to one of people, with all ‘Media Advertising’ as well as posters and cutouts concentrating merely on individuals to be elected to represent a district. Individuals therefore have had to raise funds, use public resources unashamedly, a perfect example being the foreign minister using the resources of his ministry to plug himself as the savior of SL, and somehow fight to get the preferences. You judge whether he deserves to win.

In this election it is tough for the hardworking to get their names across as they have been unable to raise the mega funds available. If I were to give examples from the Colombo District, I say that Susil Premajayanth a very unostentatious man living simply in a small house, not known for taking any funds for personal gain, representing the ruling alliance, and Manju Sri Arangala, representing the main opposition, well known within his area of Homagama as a very hard working local politician who had done wonders in his area, and who commanded the largest percentage vote of any from a local electorate, may struggle to get in due to the problem of lack of name recognition outside his sphere of influence.

Whether either of these two gentlemen will get sufficient preferences, to get into parliament, I don’t know, and would sure hope so, but it is lack of money stupid!!!
We now agree the system is flawed and needs change, and I sincerely hope that the next parliament will with the assistance of the Opposition, change the system, to one that is more representative and accountable and do away with the preferences.

When in this Democratic Socialist Republic did we think it is Capitalist, Wealthy, non-tax paying, where did his money come from, Celebrity people who will get elected at the expense of competent, hardworking honest patriotic and dedicated people. The people, police, public and powers pay patronizing deference to these Members of Parliament as if they are some beings from outer space, when they have done nothing to earn this respect. Most of the people who seem to support them in public seem not to be old enough to vote, or are paid to attend, so I hope common sense will prevail, and I pray the voter will remember not to vote for the person who bought his last meal, but the person who best can represent his or her interests in Parliament for six long years and not defect to another party!!!!

Tuesday, April 6, 2010

Agriculture Labor the most prone to accidents due to the nature of the job


This weekend, we climbed coconut trees to pluck coconuts, climbed an Amberella tree to shake the fruit to the ground, Climbed a thorny Orange tree to hand pluck the Oranges to prevent them from falling to the ground, and then climbed the roof of a shed that has roof tiles to pluck limes from the top of the lime tree as the limes within easy reach have been stolen by the passers by either for personal use or sale.

The above together with using the scythe to cut paddy and a whole host of manual activity on the land is highly dangerous. I still have a scar to show for cutting my finger badly when cutting paddy a few years back, as reported in my other blog (www.rajaratarala.blogspot.com) some years back.


On the other hand, this labor is the least qualified, has the least education, and least paid, performing the most dangerous work one could imagine. In turn I have mentioned I take my life into my own hands at nights when trying to close the water outlets to neighbors who have taken my water entitlements so that I can get some much needed water to my paddy fields.


With most farmers working just for themselves, and not being in companies have no recourse to any compensation for accidents in the normal course of work. I have known families being destitute because bread winner is incapacitated due to injury. There is no real social safety net to take these into account except for possibly personal savings. Thank heavens for the free medical treatment the state offers, which I have used numerous times for my staff in such situations.

We have a welfare scheme, Samurdhi, which is so politicized it does not help the needy, just the influential who use the system for personal gain. It is important that there is more emphasis placed by the agricultural departments on workplace safety, and on site training for people on the best methods. I am personally affected, as I recently was told I may be getting a serious problem of sciatica due possibly lifting large bunches of King Coconuts, sacks of paddy and rice, and also driving long distances in a vehicle that is arguably the most uncomfortable to drive. I know I have to do what I do to survive, and I don’t have dependents except my staff to worry about. The thought that I don’t have insurance to cover an eventuality is disconcerting, but to think that the majority of the people in this field are winging their lives hoping they will not have serious accident is not good enough.


Just to take an example, there is so much rubbish and broken glass thrown everywhere in the rural areas, by people who have had alcohol either in company or by themselves, going barefoot, a common trait here is just asking for trouble.

Tuesday, March 30, 2010

Water, “Precious Water”, the still unappreciated “Gold” of Sri Lanka



For the first time in my stay in the farm at Godagama, the prevailing dry conditions have left the main well we draw water from, completely dry. The photos in this blog are the staff engaging in digging the well a few more feet so as to ensure a permanent supply of water. This reminds us all in Sri Lanka, how important our wells are and the wells we dig actually tap into the ground water supplies and the protection and regeneration of groundwater should be a topic of urgent discussion.

In general wells near a paddy field don’t run dry, but this time one did propelling me into a complete rethink of my and the nation’s general water usage policy. To put it in perspective, my locality which was thick with rubber estates 50 years ago is now thick with suburban housing with a well in each home. Then rain would soak into the ground without runoff, due to the sponge like qualities of the soil, refilling any groundwater levels or aquifers further down. There are now no trees to slow down and soak the rain water and instead there is massive run off of top soil and water into the paddy fields, which in turn render the paddy fields useless for cultivation due to the flooding that takes place. This water that seeped into the soil, now finds its way through a series of canals into the Kelani River and the sea, thus depriving us of much needed groundwater supplies.


There is nothing like a personal experience to get one’s adrenalin running at full throttle, to try and persuade all our people to value this free resource. Sri Lankans are world famous for taking anything free for granted and snub the provider of such. There was an outcry when a rumor surfaced about privatizing water, or preventing us from digging wells and instead purchasing all the water we use.

We MUST understand that the well we dig, and the water we take, be it from a well, river or water supply scheme even if it is on our own property is the resource of the nation. One drop of water we take denies another of that same drop, so we must justify that we use it productively sparingly and warily.


We are the most fortunate people on earth. I indulge in well baths, bathing in rivers, and from the tanks without a care in the world. In fact I regularly bathe at least twice a day, and I don’t think I value this enough as a super luxurious lifestyle. As a farmer water is so essential to everything I do, and however much I tell my staff to use it wisely, plug leaking faucets, and realize that they are the fortunate few of the world who frolick in their daily well bath in Godagama, tank bath in Ratmale or river bath in Raja Ela, without a care in the world. As always the appreciation can only be nurtured in our youth to value what is free.