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.