Thursday, December 22, 2016

Time for Adults to determine policy, and remove the Montessori kids who seemed to be determined to run our lives!


It is becoming quite clear that Sri Lanka does not have a clear policy to manage the use, abuse, control, and eventual weaning of our citizens from the supposedly bad habit of cigarette smoking that is claimed to be the No 1 killer in Sri Lanka today.

I use the word ‘supposedly’ because I have to believe that the link below is accurate as it was written by the Chairman of the National Authority on Tobacco and Alcohol, Dr Palitha Abeykoon in today’s Daily Mirror (Dec 22nd 2016)

The reason I use this word was that in the same paper today, there was an article on Oral Cancer, Prevention and Awareness that puts Oral Cancer as the No 1 cancer in Sri Lanka. Unusually for one day, we also had an article on the missing Heroin that is detected, confiscated and gets back into the market!

On a related note, in today’s FT we had the news of the detection of illegal cigarettes valued at Rs75M. see link

What is clear to one who has devoted this blog over the past 9 years with 2500 pages of advice on how to improve the quality of life of people fortunate to live in this Serendipitous isle of Sri Lanka, is that those in power and with authority continue to do what is in their personal agendas to actually reduce the quality of life of those who live here, which by default, results in the continuous emigration of the best and brightest to other lands to and thereby ensure we have NO chance of achieving our birthright of enjoying living in Sri Lanka.


When one reads my blog entries on this particular topic of the Tobacco Debate on my past blog entries recently, namely and one can understand the gist of it.

In referring to yesterday’s FT article,  which clearly shows the massive drop in Government Revenue from Tobacco Taxes which I predicted vociferously in the previous blog entries referred to above, but which fell on deaf ears, due to obstinacy of the decision makers who were sold some cock and bull by Nishan de Mel of Verite Research that there was lot more scope for Tobacco Tax increases WITHOUT a drop in overall tax yield from his comparative studies of other Countries. I don’t need to explain here why his analysis was fundamentally flawed, but coming from an Oxford educated person, our uneducated leaders somehow are impressed!

Lets take a holistic approach to the issue at hand, repeating some of the points I have already made for the reader of this blog entry. I will tackle this issue on two fronts. Firstly in terms of raising Taxation Revenue, and secondly in terms of reducing the population’s proclivity of knowingly self-harming, to reduce the Nations expenditure on Health Care, and reduce the productivity of its Citizens arising therefrom.  

What does Sri Lanka want in 2017? They need to raise as much taxation revenue as possible in order to both reduce its deficit to acceptable levels, and ensure it is able to refinance international borrowings at lower interest rates, by gaining business confidence of lenders, which is reflected in the strength of Sovereign Ratings. The raising of the Tobacco Taxes to unacceptable levels has effectively killed the goose that laid the Government’s Golden Egg. Namely ONE tax payer who contributed the largest to the State Coffers, Rs100B per annum, is now contributing substantially less due to this miscalculation.

On the second front on Health, and I wish to disagree completely with  the Chairman of the National Authority that the steps taken have actually contributed more to the increase in illness, because, not only is there a shift to a greater emphasis of chewing betel and arecanut, a move into less healthy beedi, even illegal cannabis, but also the shift to filter less and cheaper cigarettes in the form of Capstan all which combined lead to a more dangerous and uncontrolled usage of substances that can be exceedingly harmful, which will NOT lead to a lower death rate, but arguably a much higher level of suffering.

If the above link on the smuggling of cigarettes is a forewarning, we are likely to see more Politically sponsored smuggling, leading to an erosion of the moral fabric, and fall in state revenue from Tobacco. Worse if smuggling continues unabated, it will result in Ceylon Tobacco calling it quits in Sri Lanka, leaving the field open to the state sponsored COWBOYS to take over, turning a highly regulated industry into one that is NOT regulated!

I don’t need to emphasize the employment loss in the rural areas arising from livelihood of farmers, who have to move from a predictable and well managed cultivation, to a totally uncertain environment of livelihood in agriculture. In a country that is trying to discourage imports, and increase exports, this is another body blow, as we will begin importing cigarettes as well! An about turn from the direction we are supposed to be going to.

Of course the allied costs of lack of confidence of investors of unpredictable state policies that can reduce a highly competent and established business to its knees, are immeasurable. This kind of schizophrenic law making that bears NO relation to what is best for Sri Lanka as a whole will lead to a reversal of every good intention, as words and actions have NO congruity.


In case the reader believes I have a vested interest in this argument, I must repeat I have NO interest in protecting Ceylon Tobacco, I am only seeking justice and fair play in Business that has the Country’s best interest at heart.

Just for the record my grandfather HAJ Hulugalle was a director of CTC, and he was friendly with Lord Aldington who was possibly Chairman of BAT in days gone by perhaps 50 years ago. More recently my Uncle SK Wickremasinghe was Chairman of Ceylon Tobacco too, before being posted to London as the High Commissioner. I as a UK qualified Chartered Accountant was involved in the audit of some BAT subsidiaries in London, when I worked there for 11 years, and have some knowledge of how the business model of Tobacco has been developing over the years where it has become concentrated in a few players. 

After all prior to consolidation, Imperial Tobacco financed the establishment of Bristol University which I attended, and have therefore indirectly benefited from their largesse! I have never smoked though, but might be persuaded to start now, as the product is now so exclusive to only a few who wish to flash their ability to afford a cigarette, the only means by which sales would increase in an increasingly irrational world. It is time CTC also sell a pack of Cigarettes at Rs5000 a packet, because they can recoup their lost profits by such means, and there will be many of the irrational elite who would like to show off smoking those packets! Wouldn’t that be a laugh?

It is time the Government engages with the Ceylon Tobacco Company in a positive manner, instead of giving them the cold shoulder, so that we mutually benefit from their continued existence in Sri Lanka. Once the decision is made in London to leave Sri Lanka, there is NO point in trying to chase the horse, which has bolted out of the barn door! We in Sri Lanka can never go fast enough to catch the horse!   

Wednesday, December 7, 2016

Education- Singapore tops the World so where are we? At the Bottom!

No, we don’t even make the cut of the first 70! As the report published yesterday confirms Singapore has topped the WORLD LIST for Science, Maths and Reading the three that are measured for this PISA ranking. (Programme for International Student Assessment) This is a remarkable achievement for a place that only became Country in 1965 and was way behind Sri Lanka when we obtained independence in 1948.

It is time to acknowledge first that we are bad, as that is the first step realizing how the world’s best brains at birth through a hugely flawed education system does not even make the cut in international rankings!

This bullshit about 99% literacy that we have heard since the day we are born in not worth the paper it is written on, when the closest place to Sri Lanka which is one of the few places Sri Lankans can travel without visas, has the best education and it goes for rich and poor alike, quashing the theory that family wealth plays a part!

The BBC article is also worth reading in full to understand why Singapore is so good, and what it is we MUST do before we can even think of getting there, as I believe we can in my lifetime if we begin today.

I want my readers to know that I have written over 150 articles in the 9 years I have been writing this blog on Education Topic alone, and the answers are all within this blog. As the links more than amplify, the secret is in good teachers who are able to get the best of the students and motivate them to show their true potential. It is elementary my dear Watson, there are NO secrets to it.

We have some of the dumbest teachers and most regressive system of hiring and remunerating teachers in the world, and we have not learned this simple lesson. It was proved that one of the schools that topped the Country in the Scholarship exam did not have proper class rooms or facilities, only dedicated teachers. What more proof do we want?

We must sack Ministers and Administrators and start from scratch. Give me 5 years as Czar and I will show you what can be done! The Govt. allocated 6% last year and could not even spend 1.5% (a quarter) need I say more?

Friday, December 2, 2016

Gods in shackles ( screened at the National Film Theatre 303 Baudhaloka Mawatha at 6pm on 1st December 2016

This is a 92 minute English language documentary film that explores the use of Asian elephants in India’s cultural festivals and temples. It was nominated at the United Nations & Jacksonhole Film Festival in New York 03rd March, and has won six international film festival awards.

The emotional story unfolds against a stunning backdrop in Kerala, Karnataka and Kolhapur, Maharashtra, India. To amplify the beat of this film, approximately 200 hours of powerful footage was gathered. Gods in Shackles is a story that has never been told before, it’s an epic film, visually stunning, entertaining, edgy, and fast-paced, magnified by cultural and classical musical score, featuring leading edge motion graphics and animation.

It follows the lives of four celebrity elephants for a year - three male festival elephants, and the only female temple elephant named “Lakshmi”, featured in this film. A fifth male elephant named “Sundar” who made international headlines has also been featured. Sundar gives hope to thousands of temple elephants across Asia. His story is shown here, from capture to his release into a wildlife sanctuary – the Bannerghatta Biological Park in Karnataka, India.(extract from preamble)

I do not need to add any more to the above, except to say it is a must view film for all, especially Elephant owners including Temple Priests who have and aspire to have elephants for perehara. The importance attached here is the true nature of an elephant, understanding it, doing what is humanly possible to give the elephant the best deal possible, now that it has been removed from the wild, and some having been bred in captivity. Never to remove any from the wild!

The whole concept of Pinnawela will take on a new meaning, where a larger land area, replicating natural forests and the ability to roam around unfettered MUST result, if we are ever to declare that we treat our captive elephants humanely. I must confess, the care of both elephants in captivity and the wild took on a new meaning having watched this film, realizing how sensitive elephants are, both psychologically, and physically, being able to recognize small changes even in temperature to say nothing of being able to feel the human touch however lightly one touches, so any piercing would cause enormous pain to the elephant who should only be coaxed by words and gentle nudging, not tied in chains or using sharp ended instruments meant to cause hurt. 

I am so glad I saw this movie and would recommend that everyone in Sri Lanka watch it to know the distress this causes elephants on parade wherever they may happen to be, however we misinterpret it to mean they are actually enjoying it!

The most I can say is as an obligation to its owner, they are merely  carrying out a DUTY out of necessity and not out of choice.

There is a further public screening at the same venue on 8th December @ 5.30pm and I highly recommend it to anyone remotely concerned about how we really should understand our gracious neighbors, that make our nation actually so graceful and grand so we can live side by side in harmony and NOT acrimony!

Wednesday, November 23, 2016

Consistent policy is NOT something you play games with for short-term political mileage.

That is why we have got into a mess with the lack of consistency!

Let us take the example of Cigarettes. The Ceylon Tobacco Company the highest valued company on the Colombo Stock Exchange until the Govt. increased taxation on cigarettes, and has now gone down to second position behind John Keells, with a market cap of Rs163B, pays at the rate of Rs100Billion to the Govt in taxation each year. That was before the recent tax increases, namely the increase in Excise Duty, and VAT on the total Price including Excise Duty, or in other words Tax on Tax!

If the policy was to raise revenue by increasing taxes, the Finance Minister will have to immediately change his revenue forecasts even as the budget debate continues, as we have seen a DRASTIC fall in the taxation collected, much as I predicted in this blog a few months ago. Now it has halved! How is he gong to pay for his miscalculation?

Actually any moron could have forecast that trend, however the know nothing know it alls who pretend to run this Country (into the ground more like) are happily sailing in a sea with NO wind, (going nowhere and not realizing it) as they are busy debating figures that are all wrong from the beginning!

To add fuel to this fire, Minister Rajitha Senaratna announces another acinine proposal in the middle of the Budget debate, to prevent cigarettes being sold singly by shop keepers, and that they can only sell them in the sealed packets of 10 or 20 that they come in! Have they completely gone nuts? As long as I can remember in Sri Lanka, single cigarettes have been sold so people can simply smoke one or two after a meal, and not have their packets go stale, for those who cannot do without a cigarette while having a drink or after a meal. It was actually a means to reduce consumption NOT increase consumption. It is clear these ministers who live in IVORY towers have NO clue how the poor and those attempting to give up the habit actually try to reduce their smoking.

This attempt is clearly a stab in the back for the poor, and those who smoke minimally, while pretending to be a progressive move in the fight against smoking. This with the full connivance of the GMOA, another body, who revel in the people’s sickness and NOT in wellness, as the all powerful, money grabbing self serving Trade Union.

As if to emphasize the point that Dr Senaratne always makes his entry at the most inappropriate or ill timed moment, this has NOTHING to do with the revenue raising or losing capability, and is a bogus attempt at deflecting the crisis facing the Country, to a wholly unworthy trick to fool the people as another progressive step.

In my opinion, this is going to encourage some people to buy a packet, which they cannot afford, and somehow find a means to stretch it for as long as they can. The flip side of this exercise is the devastating affect it will have on households, when some of the poor people’s spending money is shifted to cigarettes from food, thereby affecting the poor woman at home trying to feed her children, in light of the increasing allocation of the household budget to tobacco! In all these exercises to boost Govt. revenue those who suffer are always the innocent, and the total lack of compassion from the Parliamentarians, nor their lack of concern as to how some people actually live, has resulted in huge policy mistakes.

I wish to add one more dynamic to this Tax issue as well the Packet Sale issue, as now the Beedi sales are skyrocketing and the tax collected thereon is minimal. Further the raw material for the beedi is imported, while the Tobacco is grown in Sri Lanka, further affecting the livelihood of the Tobacco farmer with the lower demand owing to less cigarettes being smoked!

A worse phenomenon is the increase in Betal Chewing as reflected in the huge increase in price of Betal leaf, and Arecanut/Puwak which now is even being imported to satisfy the demand. We have an export market for Betal leaf to Pakistan, which is now not as important due to the sudden resurgent demand, making it more lucrative to sell locally. This tendency to chew betal as an alternative to smoking, and with it the attendant, throat and mouth cancer threat has NOT been addressed by the famous GMOA!.

Actually if health costs are paramount, then a tax on sugar to reduce consumption is bound to lessen the prevalence of Diabetes that is spreading, and so the Policy schizophrenia is even more apparent with this non-congruence of Govt. policy referred to as the main topic of this essay. Remember the reduction is the import duty on Sugar?

Actually Sugar tax MUST be imposed sooner rather than later at Rs50 per kg to reduce demand and raise revenue, which will have the attendant community health benefits. However that is for a different entry on another important debatable matter of social choices.

The President has not added congruence either as his wont is to ban smoking, whilst the Finance Minister is desperate to increase Govt. revenue, and so their policies to achieve this duel objective have gone ary achieving neither, creating a worse healthcare crisis not better, as we can clearly see that the GMOA actually works to worsen the Health of the people not improve. 


Monday, November 21, 2016

Stoking fear is NOT a joke, it plays into the base instincts of the easily FOOLED! (BIOTEF)

As if the Donald Trump victory has not taught us in Sri Lanka a lesson is an indication of the level of mental bankruptcy of our leadership, as to what can happen when an opportunist sees a chance and FLIES with it literally as the Donald did in the USA and left all those who are NOT his fans STUNNED, while the Trump backers did not find it out of the ordinary. Many among them in Rural America finally found someone who said what they felt, and that was at the heart of this appeal, that we will now have to contend with for the next 4 years.

This is exactly what is about to happen in Sri Lanka, unless the Govt. understands the mood of the nation and tackles the growing opportunistic elements head on so that they do not get an extended life.

It is all too clear that the extremists on both sides of the fringe, and here I mean tiny minority of fanatical Muslims who are stoking hate, along with the counterweight by another minority of Sinhala Chauvinists, who see an opportunity in the limelight, inciting hatred WHICH PLAYS INTO THE BASE INSTINCTS OF THE EASILY FOOLED (BIOTEF)  barely educated types, along with some of the well educated scholars who believe in a pure Sinhala Buddhist State, as a matter of their ideology. By the way BIOTEF applies to both communities, and in generalized form in all communities.

IF these opposing ideas at each end of the spectrum are allowed to fester, and are NOT stopped in their tracks we are in for a difficult time, where when faced with a multitude of world developments, interest rate hikes, inability to repay our foreign loans, and the resulting economic downturn, will all be covered up by this resurgent false NATIONALISM that is about to engulf our common psyche.

As if we have forgotten the riots of 1983, which had a devastating and lasting impact on the well being of all who in live in Sri Lanka, why don’t we learn from the past and NOT repeat these in the future?

The answer lies ONLY in the 225 in parliament who MUST all work together to tackle this potential flashpoint and prevent its rebirth. Unfortunately it is the very same people who are taking opportunistic sides, worried about their electability and voter base, who end up playing into the same BIOTEF for their survival as they are really morally bankrupt, political hacks, past their sell by dates, looking to fight another day.

The leadership of the President to draw a line in the stand now is paramount.

The article refers to some of the measures needed to combat this ugly tendency~

I urge the majority of the Muslim leadership and the wealthy business community to get together and moderate their rabble rousers, who see an opportunity in counter attacking these racist remarks of the few chauvinists, some hiding under robes. This is an issue we cannot let rise up to the surface, because of the impending economic crisis, that would want the 225 in parliament to find the blame not on them, but find another issue for the people and diabolical media to hang their hat on to FOOL THE PEOPLE.

No one wants violence, the ISIS remarks were completely uncalled for at this time, and made totally out of context by a mentally bankrupt person who if trying to find traction, after being discredited as a fraud and liar on another totally unrelated issue. This typical ability, desire and cynical use of manipulation of people especially in the political leadership, to use the crassest treachery to ricochet personal allegations of impropriety, by appealing to the BIOTEF MUST STOP.

It is unfortunate that we do not have a media with a backbone to point out this infallibility of our leaders, so that we can quash this ricochet, WITHOUT further inflaming sensitive minds by giving it undue coverage, which it was given in this instance, which is why I have even bothered to broach this subject, as I believe it has been blown out of proportion, by people who wish to personally gain by it.

I believe my acronym BIOTEF is an apt word to ensure that the Media use this test, and NOT report incidents and events, and pontifications of treacherous individuals which has lead to the present crisis, when NONE existed just a few weeks ago. I know social media has a part to play in this, and these frustrated individuals will also use this medium to stoke their hate mongering, which it simply is.

The moderate Muslim community is also to blame for being silent, when they saw the fundamentalist elements being permitted to enter and spread their word through Saudi sponsorship over the past 30 years that has changed the color of the Muslim women from colorful saris covering their faces, to black burkhas! Islam is not any different from that of 30 years ago, it is the outward practice that has changed, and angered and caused concern amongst the majority community, that the Muslim community also must be cognizant of. It takes two to tango, and moderation is the need of the hour.

So for the President to offer a quid pro quo to the chauvinists, he must go to them with some promises that the Muslim community agree to, such as abiding with the law of the land, and if that means that minimum age for marriage is 18 then it should be for all who live in Sri Lanka, irrespective of culture or religion, period. 


Then identify the politicians in this league and make sure they become history, not the present or the future. It is time we use a test of competence and let this be question No 1!

You will be surprised how easy it will be to clean up the act once and for all using this criteria.

Thursday, November 17, 2016

Take Education for example!

I don’t want to dissect the recent budget piecemeal, as it not worth wasting my nor the reader’s time, but I would like to use just one example, of School Education to make the point. This will show the complete lack of thought, foresight, and interest our leaders have for the real issues of the day, which then result in misguided exhortations, aimed more to keep the baying masses at bay and the opposition silent, than doing something REAL for the Country, so that future generations WILL benefit. If not what is a budget for?

Let us remind ourselves that if we are in maintenance mode, we do not need a budget, let alone a budget speech. A budget speech should at most be only 45 minutes with extremely interesting policy proposals, that keep the audience engaged, and newspaper analysis full of plaudits for an overhaul, aimed at taking the economy, and all the people upwards and outwards to the future. There was simply none of it this time, except more pain and any small price reductions, like Rs5 on a liter of Kerosene, to even mention that is a JOKE, in light of a miniscule amount of people, including me who use this fuel today, as I don’t have electricity!

Lets get serious in the interests of progress, and laying the foundation for growth in an otherwise hugely sluggish economy, made worse by the recent proposals to extract over Rs300Billion from the Consumers by the VAT increase which is merely a transfer of financial resources out of the people to the Govt. which will dampen demand and affect all aspects of the economy adversely, slowing growth unless, a huge increase in stimulus accompanies it.

Surely is the Govt. and the Opposition not aware of the simple facts, or is it that their lack of basic education does not equip them even to answer the right questions.


This must be the 100+ blog entry out of a thousand, I touch on improvements to the Education System in Sri Lanka. Those in power who fool the masses and profess to give it the needed resources, simply miss the point completely.

In last years budget the people were told that the Education Spending increased by 400% and the pundits pontificated about how it would improve all sectors etc. NOT ONE pointed out, and I did in this blog, that THE SYSTEM as it was set up, could not contemplate even an increase of 25% as they do not have the tools to increase it, without simply wasting public money, on superfluous areas. Firstly, a clearly stated Govt. Policy for education should have been enunciated, and the spending should correlate to that. Please remember the sluggish Department of Education littered with failed educators, DO NOT have the capacity in them to carry out policy due to their simple lack of quality human resource at the critical levels needed to research, find, hire, train, implement and evaluate simple techniques.

For example if I say we institute a Policy decision that we gear up pre-school education to set up the mindset of our children to be productive citizens training them in the 5s type of behavior prior to entering the Primary School, similarly to the Japanese pre-school system, How can we do it?

Depending on the resource allocation, let us say we decide a pilot project of 1,000 pre-schools in rural areas need to be set up and fully resourced. Then we need a minimum of 3,000 trained teachers first. It takes a minimum of 2 years to train them to the required standard before letting them loose on the kids. We have to select these candidates extremely carefully using aptitude tests. There will be a minimum drop out rate of 25%, so 4,000 have to be selected. They have to be paid sufficiently during the training period in order to attract a high caliber of teacher.

Then in two years these 1,000 schools must be ready with the necessary training and teaching tools, and we must use existing resources, as there are over 1,000 village schools with less than 50 students ready for closure, and they can be used as the basis with little capital improvements for this exercise. If truth be told, the Govt. bent will be build on greenfield sites, due to the pressure from construction companies intent on making a quick buck at the people’s expense.

Look at the Colossal Waste of the 1,000 Mahindodaya Technology Labs which I have reported on this blog years ago. Less than 500 are fully operational now, and of those half the computers are NOT working and the schools do not have the resources to repair them, and accordingly this was a huge disservice to the very students it was meant to educate!

Cant we learn from past mistakes so we don’t repeat them. Apparently not, with the latest gimmick being the PR stunt of giving TABS to A level students willy nilly. Here again someone is in line to make a buck, and the student will NOT benefit. Would it not be better to give a scholarship to half the A level class, of students who attain a minimum proficiency in the IT use and knowledge at school, a Rs15,000 grant towards the purchase of a TAB or Lap Top of their choosing?
Will that not lead to an incentive for students who really want a computer, to ensure that they have the basic skills to work with a computer. I tell you this because yesterday, I had a girl in an A level class at the Nagalakanda School in Minneriya come to ask me to help with a lap top purchase.

“So here is her true story and make of it what you will”

She is an only child from a poor family, and her O level results were NOT sufficient for her to get into the Commerce Stream that she would have preferred to go to. Further the School forbad her to go to the better Ananda Balika School in Hingurakgoda, and she is doing the subjects the majority of the rural students in Sri Lanka follow for A levels, namely, Sinhala, Buddhist Civilization and Political Science, ALL singularly useless subjects for any of their future lives, or careers!

The schools in Sri Lanka mainly have teachers (Arts Graduates) who can teach them and the vicious cycle is repeated time and time again with no end in sight!

They don’t have the resources to do full time tuition that most of her colleagues engage in her class, but she goes for tuition nevertheless in Polonnaruwa. As she has her final exams in August 2107, I advised her to continue and try and do her best to get as good a result as possible, being her first priority, BUT not to repeat them for another year if her grades are NOT good enough.

She then said as soon as she finishes, she wants to do a course in English, as she has finally realized the importance of being fluent. She would then follow a computer course, usually MS Office package if resources permit. I was not clear why she wanted a lap top now, as it would not do her any good for her present A levels!

I told her that a 6 month English course will NOT automatically make her fluent in English, and to date having an English class all the way from Grade 1 to Grade 13 every day, has been an utter waste, as she can barely read write or speak the language. Her personal effort was the marker now. Have a dictionary, try and read an English newspaper and try and understand. Watch English TV, and try an follow some English in her spare time, to familiarize herself with the sounds of English and some of the words, recalling the little she MUST have learned at school after all these years.

Is she a candidate for a computer? I don’t think so! Why does she want one? Possibly because some in her class have one, and she does not. SUGGESTIONS~

Thursday, November 3, 2016

The HOPE that rises from COPE

In today’s FT Dharisha Bastians painstakingly goes through the history of the latest deliberations and fractious discussions in COPE on the Bond Scandal, and after the final report resulted in near Unanimity of conclusion from all parties, that despite huge strains on the Yahapalanaya Govt. it finally came through where its independent oversight mechanisms set forth in the 19th Amendment, at least APPEAR to be working, and that can ONLY be a good thing.

Make no bones about it, the sea change from the Rakapakse era is in fact undeniable, no matter what spin the JO continue with, and the latest time wasting gimmick that needs to be nipped in the bud is the yet another challenge against the Prime Minister’s legitimacy.

Of course when you have the same people shuffled around in Parliament and in essence the PIE remains unchanged, even coming to this level of transparency is a sure sign that despite many obstacles, the principle of checks and balances are in fact operating, albeit painfully slow.

Where to next? We have spent too long dwelling on these series of transactions to the detriment of many huge problems that Sri Lanka is faced with. The lack of a firm head of CIABOC for starters and I do not wish to go through the whole list here.

The PM has laid down his strategy for the current year, which sadly has NOT yet been discussed by commentators, and that may presumably because we are awaiting the Budget Speech on the 10th to give focus to his wish list.

Sadly very little of substance has been achieved in 2016, and I trust we must already make a new year resolution for 2017, to get our skates on and speed up on all fronts, and stop wasting our time questioning and making allegations, unless fool proof evidence is available. The reason is that it also destroys the confidence of the people, because the Media love to exaggerate an event or incident to make an impact without realizing the negative consequences of giving too much weight to a topic of little importance to the goals set to move forward.

It is in all our interests to move on at speed on the reforms that are still required. The parliament will be fully engaged for a whole month on the Budget.
It is important then to ensure that the Budget is fool proof, unlike last year’s, which was too flawed, resulting almost in a total rewrite. I trust that the lessons have been learned so that this time it is smooth sailing, with a minimum of amendments.

There is NO question that the introduction of the VAT few days before the budget is also unprecedented, and this list of 82 items that are exempted is causing palpitations around the Country at all sorts of businesses which find themselves having to keep records of VAT able and non VAT able items, and the issuing of proper VAT invoices, where many traders and retailers may have claim input VAT paid against their ultimate VAT payout.

The anomalies, such as exemptions on Prawns, and not on Fish are surprising and hints of some Prawn farmer having his own way. In any case all exports are NOT subject to VAT and some explanation is warranted on this aspect.

ALL Meats, Chicken and Fish sales etc are also subject to output VAT, which means that the consumer is going to feel the price increase by 15% sooner rather than later. The STEALTH Tax of the telecom tax of 50% of the payment, is a massive increase from the taxes prevailing and will go to the heart of the people in EVERY strata of society, young and old alike.

This little trick of putting out the VAT issue before the Budget is supposed to fool the people that the BUDGET did not raise taxes, when in fact the result of the VAT Bill is that a huge revenue raising exercise has resulted, over Rs300Billion, that will go a long way to reduce the deficit of the Government, but the Price of Cigarettes at Rs1,100 for a pack of 20 is definitely going to reduce the Tobacco Taxes, due to reduced consumption, giving a windfall for the Beedi Mudalalis who would have hit the jackpot, as their taxes have barely increased. It is open to question whether this is a good thing as the health hazards may be worse.

I cannot therefore imagine a scenario where the populace at large will be happy with this budget, and with the overall need being to reign in expenditure and pay down debt, growth can only be expected by incentivizing industries earmarked for growth. The future is in high value added industry using less labor, due to the severe labor shortage being experienced at present.

The only HOPE THAT CAN COME OUT OF COPE therefore is a sense of conviction on the part of the Private Sector, the driver of the Economy, that both employers and employees believe that productivity gains will allow substantial pay raises, due to market forces that will force labor saving, will enable workers to overcome the price increases, and still result in a better quality of life. 


Wednesday, November 2, 2016

Tourism – It is still the same as 12 years ago!

I was heavily involved in the World Travel Mart in November 2004 before my return to Sri Lanka for good. I had been continuously involved as the supplier of complimentary tea to the delegates and guests for many years as I was living in London then.

I was shocked, more like appalled that nothing seems to have changed in this period as far as the Sri Lanka Pavilion is concerned. Apart from differences in what is highlighted, when I saw the photos and we are still using the same style of Kandyan Dancing, I was wondering was this taken 12 years ago?

Just click on the link and imagine whether it could have been different. Trust me it has NOT changed for at least 15 years! I might even say it was better then! I have the photos, but need to put them into digital format to allow the reader a chance to compater and contrast.

In reality even the dancing styles have changed lately and I was involved in a Culture show this week at a Hall  in Kadawatha, that the wealth and depth of our traditions, as well as the versatility of our amateurs in our area, with very little training and innate natural ability, was immense and that is what our visitors to this country should see. What a difference here and what a shame of the same in London?

Where have we gone wrong? I think it is called Government! Our Public Servants who are involved in making the arrangement use the same o same o people to do the same things and DO NOT venture out of the norm, as they are NOT hoteliers and they are not the people who earn a living from Tourism.

It is time the Private Sector took over the whole issue of marketing tourism, as they know what is on offer, and how to attract people in 2016, when faced with choice from all over the world and decisions are taken on line and little by way of tour groups, except for the traditional ones.

Actually WTM should be more focused on high end tourist products ONLY, and so we build a niche and get the agents of the tour companies to visit Sri Lanka for their block bookings at knockdown rates. Marketing Sri Lanka as merely a high end unique destination at WTM where we have to compete with all the world, it is better to distinguish Sri Lanka from the others.

Remember back then the little booklet of hotels was only about 100 and the number of Tourists were about 400,000. Now it is six times that ON EACH SCORE and our Organizers are still living in a world that has NOT changed. What a tragedy for the industry to be saddled with dead horses, when the foals in waiting are rearing to go, and no one has even given them a showing internationally.

Sunday, October 16, 2016

The most response I have had for my posts since I began posting here in 2007 - yesterday's advice to the Monetary Board

I wish to thank my readers, including those on my facebook page which generated most of the interest, who have been most interested in a topic I really did not think would go too far, as the subject matter was a little hard to understand at best. However it was a principled stand that I took, trying to enlighten the reader to the conspiracy hatched by the Media, aided and abetted by people who have ENVY and JEALOUSY written all over them, to attack success. 

This is all the more hard to stomach for people because the object of their ire is a 33 year old billionaire who basically appeared from nowhere just about 5 years ago, and is now worth in excess of Rs50B. All this in a matter of 5 years.

This is the year of YOUTH and to that we must bend our heads, if we seriously believe we can get out of our economic woes and face the global dynamics with strength.

If Saudi Arabia, one of the slowest in making any moves out of traditional practices, has appointed a 31year old as the Deputy Crown Prince, who is now effectively making much of the decision making in the Kingdom, we can too!

We in Sri Lanka seem to be a long way from that point, but if discussion of what youth can do in light of these last year’s events turned into scandals, courtesy of ignorance and false information put out by aging has beens, who do not like a new generation taking over, we cannot move on. Don’t be prejudiced, be objective.

Much of what I wrote yesterday, was in fact an AGE WAR, where the OLD are trying desperately to hold onto dying practices that have NO place in society today.

The time for Youth, where the Central Bank is still listens to what people who have absolutely NO input in this century. Worse, the Media also make the same mistake in taking heed of has been Economists, and past staff of the CBSL for advice that is far from objective, and ONLY out our respect for age.

I sincerely believe that CBSL MUST also rise with the sign of the times, and have new people with new ideas in their decision making capabilities as commented by people who gave me valuable pointers, which I hope the Monetary Board of the CBSL will heed, or at least consider, when taking important decisions that affect the Country. 

Let us not forget that we will be dead soon, it is those who are 30 and under who will HAVE to bear the burden of our mistakes made out of arrogance. Millenial thinking is on a different plane to that of ours and we chose to belittle it at our peril.

Saturday, October 15, 2016

An Open Letter to the Monetary Board of Sri Lanka

October 15th 2016 (POYA)

Dear Eminent Sirs,


The reports in this morning’s press arising out of your long awaited meeting yesterday, frankly, did not amount to a “HILL OF BEANS”. I would have liked to have seen some leadership emanating from your goodselves, at this crucial moment.

Frankly you all appear to act like pre-school kids, taking a cue from the parliamentarians, who act like a motley collection of “ata pass” survivalists! Trying to decide on the future course of Sri Lanka for the next 50 years, when the next 12 months seems to be a stretch!

Firstly, may I remind you of your primary responsibilities; which are to guide the Policy of the Central Bank, in as much as it relates to Monetary Policy, namely, the exchange rate, interest rate and management of public debt. It is important that these actions give confidence to the international community, so that our Sovereign ratings are enhanced, which will result in lower interest payments on debts, and the ability to borrow at lower rates in future. It is timely to remind you that many countries’ Central Banks currently borrow at near ZERO INTEREST RATES.

Needless to say the actions of the treasury ALSO has an impact on the above, and they must in turn manage fiscal policy, budget deficit, and public spending in balancing the best interests of the Sri Lankan people within Govt. policy.

Frankly, it is NO secret that both arms have failed miserably with regards to this over a very long period, and scapegoating of those without is not the way to go. The crisis we are faced is NOW CRITICAL because of the profligacy of the previous administration, where the excess borrowings incurred has not been able to provide a public return on capital investment, and the use of long term funding to meet recurrent expenditure.

Having explained these basics, your primary role today is to know how to manage the extraordinarily large Public Debt in a manner that is least painful to the Sri Lankan people who will eventually have to repay this increasing liability over many generations to come.

Unfortunately you must have the courage to pull up the fossils in the Public Debt department who acting as neophytes are making an almighty mess of the job they have been given. It is for you to determine if this is willful, or incompetent.

In my opinion, I believe the whole department MUST be replaced by professionals from outside, and even foreign assistance in order to better manage this aspect, and even obtain the assistance of proven consultants, who are capable of designing a system that is simple to operate and manage the revolving debt. (the ability to refinance borrowings when they fall due, at the lowest possible rate of interest)

It is most important to have this fully operational when the massive refinancing activity is required in 2018 and 2019 when we have to meet capital repayment of large foreign loans.

“Given this background, let me come to the main point I am trying to make here”

It is a blind leading the blind mentality in the CBSL situation now. You have JUST ONE primary dealer, who has identified a weakness in the system, employed the best professionals in the Country, pay them more than your Governor, and who merely take advantage of your own incompetence.

I am very sorry to say that the other primary dealers do not have the same vision, particularly the arms of the clearing banks which have access to far greater funds are NOT bidding! This leads Perpetual Treasuries to take the risk, and reap the reward. Why? The head of PD at the Bank of Ceylon probably has a comfortable remuneration package, whether or not he makes any Bond Dealing profits. Why should he break a leg to work hard and take risks? In this case BOC a state owned enterprise, instead making additional billions in profits for the people of Sri Lanka, lend money instead to Perpetual Treasuries, with full collateral to make money.

Therefore instead of finding fault with the performers, it is time to find fault with those who have failed to perform! Wouldn’t that make a change in thinking? That is the mindset of the 21st Century, and it is time some YOUNG blood is infused into your ranks to be aware of, and retake the MISSED OPPORTUNITIES.

You, collectively have been faced with an untenable situation, where the Media, has grossly misinformed the public due to ignorance of how these systems work, who are then baying for blood. You MUST find fault squarely with the CBSL and its current practices that are outdated, and also the GOSL owned Banks’ current risk averse strategies that are a drag on this economy. You MUST force the clearing banks to reduce spread. That is the ONLY way to grow this economy. That is the single biggest reason for the lackluster performance of the Sri Lankan economy to date, and in NOT taking a loan to buy sophisticated machinery in a company I run is a small micro result of this bad policy.

So please have the courage of your convictions to do what is right, and NOT be partial to here say. What we need in Sri Lanka is excellence, leadership and competence. In my opinion that is the problem with the CBSL, due to its hiring policies that need a drastic change. Sometimes brilliance only lasts 4 years in one’s life, and we have lifers in the CBSL keeping desks warm, worse costing the economy trillions due to their unwise action or inaction!

We as a country cannot afford baggage. We MUST have the best of the best seconded to the CBSL for a maximum of 4 years in the prime of their lives, to do the job and be paid for performance. You will see instant results.

By this show of incompetence, you have now raised the bar. If the CEO of Perpetual Treasuries gets a bonus of Rs500M due to your errors, then it will cost you more to get the best. Remember it is NOT Perpetual Treasuries fault for making profits, it’s the CBSL fault for making it so easy for them. If I had the same access to the funds, so could I do the same, and I am no relation or friend of Arjun Mahendran!

After having read what I have to say, if you believe you are not up to the task, and we understand that, please resign and handover your position to someone who is up to it. I know sufficient independent knowledgeable people who can take your place there, and are able to direct the operations of CBSL in the BEST INTERESTS OF SRI LANKA. This is NOT a sinecure, it is a real JOB.

The future of the Country is at stake and it is your call we are heeding.
Thank you

Ranjit Hulugalle

From the forests of Sri Lanka in basic accommodation with no electricity either.