Saturday, October 26, 2013

It is not tax incentives that ultimately determine foreign Investment – Casinos . What is the market? Can I be a monopoly?

In the continuing series of blog posts we must be extremely grateful to Dr Harsha de Silva MP for making a big noise about the sweetheart deal Packer was getting, that the Govt. decided to postpone the Casino concessions gazette. The con that the JVP, Hela Urumaya, NFF, Muslim Congress, BBS, Sihala Ravaya and others were making were merely political posturing to gain favor amongst their own faithful and nothing to do with what is good for the Country.

On the role of Tax incentives, I will merely refer to the link on a publication by IPS  that shows there are far more important aspects about responsible Govt. and stability of policy framework that play a part in Investment Decisions, and unlike what Laxman Yapa Abeywardene – deputy minister of investment promotion in the Economic Development Ministry, said when he put his foot in his mouth, that it is tax incentives that will bring investors into Sri Lanka. He must be meaning that as this Country is a den of thieves especially in Govt. only tax holidays will persuade people here, as all the more important reasons of drawing investments to Sri Lanka are absent despite what the Govt. says!!

So as the article in today’s Ceylon Today points out   why should SL give more than is necessary, and follow the practice of all other countries in NOT giving tax concessions at all, and follow normal business rules after selling the license at a market rate of US$1B which can be proved as a minimum value of a gaming license bearing mind the particular advantage of SL  with its proximity to India.      

I will add a further dimension to this, by suggesting that we build the Mega Resort in somewhere such as Kalpitiya, which will develop a zone away from Colombo, which is already crowded and has more organic growth space requirements,  that should not be further squeezed by a resort catering to the Foreigners. The infrastructure can then be developed to cater to that, which like the Vegas resorts allow a larger area for more time for families where not single gamblers but families, especially from the 100Milllion wealthy Indian population the main target market, who will then have a place to come within a two hour flight from anywhere. There must be discussion on how this whole project can benefit Sri Lanka and NOT a few individuals or Companies as is the case at present, as their self interest appears paramount over the Nation’s.     


Anonymous said...

the problem with this argument is that as soon as you accept the reality of casinos in sri lanka and making proposals to maximize national benefit, the anti-casino bloc that bases their opinion on moral grounds is out of your support-base. since that includes most of the country, you're not doing yourself any favors in winning future elections this way, rather opening up for a 3rd force that was anti-casino on moral grounds to enter the fray and further divide the opposition voter base

Anonymous said...

1. Colombo is the way to go for location
2. One casino monopoly for 10 years
3. No taxes for 10 years
4. Minimum one billion investment
5. One US$ one BILLION license fee UP FRONT

License Fee Directly invested into renewable energy (wind/solar) with an reduction in the top electricity rate to Rs13 per unit as soon as the Casino is open for business.

We allow one Casino for a lifetime of reasonably priced electricity. Seems like a worthwhile tradeoff for me.

Anonymous said...

Add to the previous:

1. Cancel any plans of Sampur
2. Give Lakvijaya back to the Chinese and cancel all related liabilities
3. Have a lifetime of clean power and set an example to the world.

Ratmale,Minneriya,Sri Lanka said...

Anon two and three sounds like a superb idea. but like what Anon one said, it cannot pass the political test as the electorate is semi literate and led by people with self interest and NOT national interest

How can we overcome that hurdle and really help the country?

Anonymous said...

the way to overcome the hurdle is to stick to principles of morality. these are timeless and will last long after all of the politicians outlive their political lifetimes. should a moral opposition take root, grounded in basics of human ethics, sri lanka will be much better served that leaders that seek economic gains over spiritual ones. let sri lanka develop into a true dharma dveepa. let the country return to being a safe place to raise families. let the country return to its ethics of tolerance, coexistence, compassion, and introspection. let men and women be free to create a peaceful and safe life for themselves according to their natural talents rather than seeking financial rewards which corrupt the human soul. if sri lanka returns to this state, it would be a great place to be. it doesn't need casinos, highways, high rises, 5 star hotels, and the like, rather people need an inner peace that comes from the confidence that the state is governed according to moral principles and the people will not be abused. look to the buddhist kingdom of bhutan and their governing philosophy for some guidance.

Ratmale,Minneriya,Sri Lanka said...

Thanks anon for that valuable insight. I really hope we can get there. It can if we have real leadership from a genuine leader who sincerely cares to adopt that and people will then follow, as everyone knows the abyss we have fallen into but are entrapped in it not knowing how to get out of it.

Interesting your example of Bhutan, as I have been using that as the way to be a completely Organic Food only country, by following Bhutan's example as the only hope for our people as pertains to their health.

Anonymous said...

Casino License and the Political Test

The way it can pass the test is:

1. Only one casino in the whole country
2. Closing down the multiple that are operating today
3. Closing down all the sporting times and like betting shops.
4. Protecting the environment and reducing import expenditure by having green energy.

Even the SL foolish electorate can figure this out.

Anonymous said...

Ratmale, I suggest looking further at Bhutan as they have a complete governing philosophy based on the ultimate goal of 'happiness' rather than increasing personal/national wealth. the happiness approach therefore includes so many things that are overlooked in the effort to constantly grow the numbers of the country rather than the experience of the citizens living in the country. Things like good governance include major considerations for community harmony, environment, health, spirituality, and other aspects of life completely forgotten in 'developed' societies where citizens are reduced to workers for corporate beehives, constantly making honey for the queen bee, so to speak. sri lanka unfortunately is turning itself into another beehive

Ratmale,Minneriya,Sri Lanka said...

Anon, does your approach require a benevolent dictatorship?

Sri Lankan public cannot chose one who espouses your dream democratically.

Anonymous said...

ratmale, it is one thing to have good ideas, but in politics it is essential to convince others that your ideas are good otherwise they never get taken up. this is the essence of politics.

do people not think that communal harmony, environmental preservation, good health, people-centered governance, etc. aren't important? of course they think these things are important and if SL has someone to communicate these things in a compelling way to the electorate they will be elected. they don't have to be a 'benevolent dictator' or do they?

the road is not only about politics, it's about giving people something that they perceive to improve their lives which leads to political success. communicate a vision to the public and herd them in your direction.