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.