What a war devastated nation needs most is resource for rebuilding. What Sri Lanka lacked most was the requisite capital. When local resources cannot be fully mobilized recourse is necessary for infusion from abroad. Both strategies have been employed by the present regime. No doubt adding to debt, but permitting of first world expenditure in a third world economy. Public debt of Rs. 2.222 trillion in 2005 has risen to Rs.6.000 trillion in 2012. Year on year increase alone was Rs. 867 billion in 2012. The GDP which grew by Rs. 1.038 trillion in the same year, has the resilience to accommodate this debt.
What the people are peeved about is the uneven spread smacking even of profligacy. What the Tamils cry for is equity in distribution to make amends for past misfortunes. In desperation, they direct their sights to foreign countries and institutions for their initiative and assistance. What they can look forward to from the government is proactive response. Their experience of the Tokyo Pledge of 2003 for Sri Lanka and of Marshall Plan of 1947 for Europe is particularly comforting.
What is most striking about the Marshall Plan (MP) is the speed with which initiatives were taken for the economic reconstruction of Europe after the War. It was considered a prelude to political stability. Both placed together were seen to ensure the health of Europe and as importantly, the economic well-being and growth of the United States. The pace is a contrast to the failure of the Sri Lankan Government even four years after the end of the war. There is not even a thought of it. Launching of a redevelopment programme to get over war devastation was perhaps wished for. As culpable in this lapse are Tamils, failing to press forth the concept of a ‘Marshall Plan’ as an effort at redemption. The idea of political solution now with reconstruction to follow will be realized in the Greek kalens.
The MP was enormous in scope and vast in geographical spread. The amount US spent in three years 1948 to 1951 was$ 12.7 billion. To get the perspective clear, it may be observed that the GDP of US in 1948 was $ 258 billion. In comparison the GDP of 2012 was $ 15.65 trillion. The beneficiaries of MP in Europe were 16 states of which, UK, France, W.Germany, Italy and Netherlands received nearly three-fourths. All five are among the top in the world in state GDP as well as per capita. Timely aid was as important as the volume disbursed. Grants to all 16 countries composed 90% and the balance was loans.
Benefits of the MP did not come easily to the recipient countries. The plan may be said to have originated with Marshall’s speech at Harvard in June 1947. The US was to assist in normalizing economic health in the world. No political stability or peace was assured otherwise. This was the germ of his thinking which was elaborated on. There were however reservations, criticism and even opposition. From conception to delivery to the affected, the path was tortuous. Some had illusions of relegating Germany to a ‘pastoral state’. Statesmanship overwhelmed such ideas. Realization eventually prevailed that when Germany’s industrial capacity remained idle, Europe’s economic recovery can only get delayed. Germany’s economic recovery was deemed central to Europe’s progress. Pragmatism was more compelling than antagonism.
In passing, reference must be made to US grants and loans in Europe amounting to $ 14 billion outside MP. This was between 1945-1947. Britain alone received $ 3.75 billion. Post war Asia too received sizeable aid. Japan, Taiwan, South Korea and Phillipines were principal beneficiaries. In the period 1945 to 1953, grants and loans given by America to the world totaled $ 44.3 billion. This was a huge amount and it had a tremendous impact on the recovery of Europe not to mention the countries of Asia.
There is something very significant to be observed however. Six major powers fully involved in the war, both allied and axis, are now among the topmost economic power houses. Five of them barring US – Germany, Italy, Japan, UK and France – had experienced severe destruction. With a little moistening the seeds have sprouted. There was hardly a spell when they remained dormant. Their inner vitality and entrepreneurial spirit explain. Perhaps their elan vital pushed them to the top even before the war. What is noteworthy is that physical destruction did not cause despondency, but infused a new vigour. Even before the MP went into implementation, they had launched their recovery programmes with their own resources. This is not to discount the very important part that MP played in providing the initial spurt and then maintaining the momentum. Timeliness was of the essence.
Lending a helping hand to lift a prostrate people is all what the concept of ‘Marshall Plan’ is invoked here for. The parallel ceases thereafter. The five nations were able to do so since the nation building process was completed decades earlier. They moved ahead single mindedly as a single polity. The situation in Sri Lanka is distinctly different. The Tamils fought and lost. What they lost in war they cannot gain in peace. If what they want is equality, it is only inequality that we will give. This is the official attitude of the government. Reducing the North East to a ‘pastoral state’ will take the country nowhere.
“Come and see” is the oft thrown challenge. Having seen two there is no appetite for more. The no. of industries in the country is 4,816 in 2012. In the Northern Province-NP- it is 11. The no. grew by 470 in the last 4 years island wide. In the NP it grew by 6. The GDP of the Province is 3.68% of the nation’s. What is seen is enough.
The initiative of the donor community is necessary for a wholesome change. A country cannot prosper when a segment is impoverished. Russia spurned US aid and mulcted East Germany almost to the tune of MP aid. Unified Germany’s mission was to bring East and West to a level of parity. Same ethnicity one would say. If for the benefit of reconciliation and unity ethnicity blindness is called for, embracing it may be compulsive to all.
The Tokyo Pledge of 2003 drawn up with a magnitude of $ 4.5 billion is a little bit of a Marshall Plan. With a tenth implemented and nine-tenth remaining, it is a viable entry point to resume the redevelopment programme. The Needs Assessment Report of 3,400 pages encompassing the North East and the adjoining Provinces is appropriate for an immediate beginning. The Report has identified projects. As funding becomes available, they are picked up, detailed estimates are worked out and projects are implemented. Even as this segment gets under implementation, a Needs Assessment survey can be carried out for the subsequent period up to 2009. Mid – course revisions are practicable.
A future of promise should firstly enable those in governance to see the sentiments of all citizens in objective light. Those thrown aside have to be facilitated to come back to mainstream economic life. Local and foreign resources have to be mobilized and utilized for this purpose.
‘We have already commenced the battle against them in the international sphere and are committed to continue it’. President Rajapaksa said so at the ceremonial passing out parade of Cadet officers at the Sri Lanka Military Academy (SLMA) in Diyatalawa today (21 Dec).
We are now at a significant phase in the humanitarian operation. Our endeavour is to win hearts and minds after freeing the people and lands from terrorism. The humanitarian operation includes de-mining, resettlement and providing basic requirements among other tasks. All development programmes carried out in the North and East are part of the humanitarian operation, the President stated.
He stressed that this humanitarian operation will not stop until the painful memories of terrorism and all thoughts of separatism are removed from people’s hearts.
‘You pass out today to contribute to this noble humanitarian operation’, the President told the Cadet officers.
A person does not excel through talent and knowledge alone. Instead, the most important element is the love for one’s country, he pointed out. ‘The government not only lined up the security forces for the humanitarian operation but also organized the people against terrorism.
The government received tremendous support from the people in eliminating terrorism’, he said. ‘The highest tribute to these people is to ensure that terrorism does not raise its ugly head’, he emphasized.>> Full Story
Sri Lanka port handles record four million containers Dec 21, 2010 (LBO) – Colombo port volumes hit a new record of 4 million containers Tuesday supported by powerful development in both transshipment and import-export cargo, the Sri Lanka Ports Authority (SLPA) stated in a statement.
The quantity of twenty-foot equivalent units (TEUs) of containers handled by the port is up 20 % so far this year from a year ago. It is also up 11 percent compared with the total of 3.68 million TEUs accomplished in 2008, the highest-ever functionality by the port ahead of recession hit worldwide trade.
SLPA managing director Nihal Keppetipola mentioned efficiency improvements and removal of safety restrictions with the end of a war had helped boost cargo volumes and reinforce Colombo’s status as south Asia’s hub port.
The number of import-export containers handed by Colombo is up 25 percent this year compared with final year even though transshipment cargo has improved by 18 percent, the SLPA said.
The state-run Jaya Container Terminal (JCT) handling its highest-ever monthly volume of 201,217 TEUs in August this year.
Keppetipola said a new computerised terminal operating program at the JCT costing 800 million rupees helped integrate all terminal operation and strategy and optimize speedy movement of containers amongst the gate and the quay.
This decreased dwell instances for containers and turnaround occasions for vessels, Keppetipola said.
A satellite-based communication system was also added to monitor container stacking
“Last year we reopened the northern entrance, which had been closed for ten years due to safety motives, to facilitate smoother maritime transportation and to enhance productivity in the port,: he stated.
“This move put an finish to the navigation restrictions that have brought on congestion at the port causing delays in cargo handling and turn-about instances of vessels.”
Sri Lanka’s 30-year ethnic war ended in May possibly 2009, resulting in the withdrawal of war danger insurance surcharges and accelerating financial development. The JCT has handled 2.1 million TEUs this year with the remaining 1.9 million TEUs handled by the privately-owned South Asia Gateway Terminals in which Sri Lankan conglomerate John Keells Holdings has a 42 % stake.
Keppetipola said the combined work of the state-run and privately-owned terminals was essential to Sri Lanka’s drive to turn out to be a major centre of shipping, trade and logistics in the region.
He said it was “an excellent test case of public-private partnership arrangements in the port management region.” >> Complete Story
The A9 highway that bisects the Northern Province and leads to its capital of Jaffna would be the best advertisement for the government in its election campaign to win the provincial council elections scheduled to be held in September. The dramatic improvement in the highway and the network of roads that connect to it have enhanced the quality of life to all who make use of them, be they the businessman or landless labourer, northerner or southerner. But the A9 highway, which was once called the highway of death on account of the thousands of lives it consumed during the war, also shows why the government cannot win those forthcoming elections unless there is a change of course.
The huge military checkpoint at Omanthai, which was once the border between government and LTTE-controlled territories in the north, still stands like an ageing dinosaur. All vehicles traversing the road at this point have to stop to be checked. At the best it means getting out of one’s vehicle and giving one’s identity card and vehicle number to be written down in a register. But sometimes it can mean having one’s bags poked and opened for inspection. Passengers in private vehicles are usually spared the hassle of getting down to be checked, but those travelling by bus have to disembark and line up to be checked. This war-time practice serves as a reminder of the war and the division of the country.
A police officer who flagged down our vehicle and requested a short ride was present when this exercise took place. He explained that the roots, or is it seeds, of militancy still remained in the people of the North and needed to be guaded against. The visible surveillance serves as a reminder to them that the government is watching and it is better to keep out of trouble. Viewed from the other side the visible presence of the military in the North is a constant reminder to the people that they are mistrusted and being treated differently. It also sends a harsh message that the North is still not fully integrated with the rest of the country, remains a potential threat, and hence it is under a state of military occupation, even if largely benign.
The large military presence in the Northern and Eastern provinces, even after the war, has been a source of grievance to the people living in those parts. The issue of the military presence has re-emerged in full force due to the government’s decision to acquire over 6000 acres of prime land in the Jaffna peninsula to set up a regional military headquarters. It is reported that as many as 25 Grama Niladari divisions (which means more than 25 villages) will be affected. Thousands of people will be affected, with an estimated 29,000 still in camps for the displaced. The military has said that this land is being acquired under relevant law, and this is done in other parts of the country also. But given the large territory and population that will be affected, and the lack of transparency in military affairs, it has also given rise to fears of army-sponsored Sinhalese settlements in the North.
It is noteworthy that the Lessons Learnt and Reconciliation Commission has recommended the de-militarisation of the north and the full restoration of civilian administration. The two resolutions passed by the UN Human Rights Council in 2012 and again in 2013 call upon the government to implement the constructive recommendations of the LLRC. The LLRC was very specific on this issue, especially in regard to land issues, which is at the heart of people’s sense of belonging and security. The LLRC said that many people who were displaced in the war had lost their title deeds and other documents proving their ownership or rights to use the land. It recommended an expert and civil administration to restore to the people what had been theirs. It also said that land policy should not be used to effect artificial changes in demography and the ethnic composition of the population.
The refusal of the military authorities to permit the Leader of the Opposition and a delegation of opposition parliamentarians from entering the area to see the situation for themselves is bound to send an adverse message to the Tamil people and to the international community about the ground realities in the north. It highlights the lack of transparency that accompanies military affairs, which is why the military is unsuited to engage in civilian affairs. Unfortunately the indications of a shift in government policy towards the demilitarization of the north are bleak at the present time. The government has recently added a second compulsory checkpoint in the North in addition to the one at Omanthai. This is one at Elephant Pass at the entry/exit point of the Jaffna peninsula. This latest checkpoint was announced a few days ago in the context of the sudden upsurge of politically motivated violence in the North which saw events organized by opposition parties broken up allegedly by security personnel in civilian attire.
The acts of violence that have started taking place against opposition activities in the North, as occurred with the Uthayan newspaper and TNA meetings, can be a harbinger of things to come. The government’s determination to win the Northern Provincial elections reflects the government’s concern that it will pave the way to political and international challenges with the establishment of an opposition Tamil-led administration with a democratic mandate. So far the government’s chief response to its local and international critics has been that it is the sole elected authority in the country entitled to speak on behalf of all the people. Every time it wins an election it reminds its detractors that whatever they may say, it has the democratic sanction of the people. An opposition and Tamil led provincial administration in the North would have a corresponding legitimacy to speak on behalf of the people who elected it.
Already two constituent parties of the government have expressed their opposition to these elections being held. The All Ceylon Muslim League headed by Minister Rishard Bathiuddin has objected to the elections being held until all war-displaced Muslims are resettled in the Northern Province. The National Freedom Front headed by Minister Wimal Weerawansa has stated that these elections can lead to an outcome that is detrimental to the country’s unity. He has also said that the system of provincial councils should be scrapped and replaced by district councils. Interestingly, President Rajapaksa himself articulated this vision of district-based devolution several years ago until local and international pressure caused him to withdraw from this position. It is possible that views such as these are being floated to justify a postponement of the elections.
However, too much is at stake for the government to now seek to either abolish the provincial council system or postpone the promised September elections. The President’s promise to hold the elections by September this year is noted in too many international documents, such as the joint communiqué signed by the Prime Minister of Japan and President Rajapaksa following his visit in March to Japan, and also in the UN Human Rights resolution on Sri Lanka which was also passed by a large majority of countries in March this year. With the provincial elections to be held in September, there is still time for the government to make the shift that would make it more attractive to the northern voters. De-militarisation of the North would come as the first priority accompanied by the resettlement of displaced people in their own lands.
In the event of the government facilitating UN Secretary General’s Panel to visit Sri Lanka, the Lessons Learnt and Reconciliation Commission (LLRC) will hear such representations on the basis of its Warrant and the usual procedures followed for such hearings, the LLRC said in a statement.
Following is the statement:
UN SG’s Panel
There have been some inquiries from the national media regarding a visit to Sri Lanka by the UN Secretary General’s Panel. Any decision to facilitate the UN SG’s Panel to visit Sri Lanka lies entirely with the Government of Sri Lanka. If a decision is made to permit such a visit the Lessons Learnt and Reconciliation Commission (LLRC) will hear such representations on the basis of its Warrant and the usual procedures followed for such hearings >> Full Story
In midst of the noise of populist political posturing on the electricity tariff increase, there has also been, as always, a considerable amount substantial discussion on the issue. While a number of OpEds have been edifying, and of our legislators, Harsha de Silva‘s lone, yet richly informed analytical voice has been most stimulating, I do feel there is an aspect of the matter that has still not drawn attention. In the paragraphs below, I will attempt to delineate this.
I will not go over all the numbers here, yet suffice to say that simply throwing out percentages of the increase does not paint a worthwhile picture. For example telling us that a 30 unit consumer’s bill will rise, 52% is a great, factually correct but misleading headline – that may allow the reader to miss, the fact that for nearly half the electrified households in Sri Lanka (0-30), this increase will amount to Rs. 75/=. Consider at this point that a loaf of bread is 60/=, a packet of milk powder 400/=, and the cost of mobile telecommunication perhaps 400/=, to say nothing of other utilities. Tub thumping about a 75/= increase of one utility is neither here nor there. On the other hand, electricity subsidies, unlike many others are beautiful and elegant since they are not easily transferable to an affluent consumer. Comparing this to the old style ration books, which were, and the new style car permits that are, would clinch the case. In any event this small increase comes in at some thing like Rs. 575 million, which again given the CEB short fall of nearly 60 Billion, is neither here nor there.
The brunt of the increase in rupee terms is borne by the lower-middle band 90-180 consumers. A 150 unit household will see its bill rise, from 2850/= to 4515/=. That’s not just 58%, its also Rs. 1,670/= or so. A 180 unit household will see its bill go up to 5130/= an increase of only 33% and rupee addition of 1275/= ( Yes, the rate of increase decreases with consumption. All figures have been rounded off, and are rough).
That’s a lot. For a family of four, in the urban service sector, living on some thing like 40,000/= a month, spending some thing like 12% of its income on one utility is a heavy burden, given others like cooking gas, water and telecommunications. Transportation while not a household utility is another thicken slice of the families budget.
So what should be done? Indeed one can agitate for a reduction; but unless this cost is recovered, those very households will see price inflation in other segments of their monthly basket of goods.
Promoting energy efficiency is the other way to go. Indeed if we are to accept and live with the form capitalism we have, it seems rather contrary to suggest as some do that the answer is to discourage consumption. That may be one model of using resources, but its silly to impose it in electricity consumption and promote it in other areas.
For example are we to have a sliding scale of pricing for personal miles flown each year? In this model, if you’ve flown 10,000 miles this year your next ticket would be twice the price of your old one. On the contrary, airlines encourage frequent fliers, by giving them perks. At the bottom of this system of capitalism – which is flawed but still viable – is the idea that flying becomes more energy efficient each year. So its not that you fly less. You fly more, at lower energy cost.
Returning to the lower-middle band of 90-180 customers of the CEB, we can make the same kind of argument, which a false, child like populism is masking. What does that mean? Well, we only speak of light blubs when we speak of energy efficiency. Since lighting is so basic, it seems safely populist to speak of moving from incandescent lighting to CFL or LED lighting. Yet is it unclear, if these well known new technologies are supported by duty waivers.
But once we leave lighting behind we will find that a household in the 90-120 band has both a refrigerator and a television. 40% of Sri Lankan households have a fridge, 80% a TV. But in the lower-middle band I speak of ownership of these appliances has to be pretty universal. It stands to reason; or else where would the units go? What is the average energy efficiency of these appliances as used in the lower middle band? I am not sure any one knows – but we can guess estimate that the turnover cycle among this consumer is long – unlike with the affluent who may turn over their appliances every 3-5 years. Older appliances are far more inefficient than new ones.
Let us look at some numbers. Switching from a 17” CRT TV to a 15” LCD TV (which has the equivalent viewing area), will save 13+ units a month, if daily viewing is set at an avarage 8 hours a day. With a refrigerator, switching from a 8 CF model that’s 20-10 years old to a fresh model, will save more than 50 units a month.
Lets say a savings of 59 units a month. Our 150 unit household is down to 91, and their bill is back down to, 2,225/= or from 4,500/=. A reduction of huge proportions. Our 180 unit household is down to 121 in this simple calculation (the reductions could be higher if the TV and/or fridge was bigger); and their bill is now 3,500 down from 5130. (If 60 units were used as the savings, the drop would even larger, but perhaps misleading, because of the quantum jump at the pricing bands).
No doubt its not that simple; new appliances do have a considerable capital cost. Yet, there is little doubt that home appliance chains sell new low end TVs and fridges by the truck load; the question is how does a consumer learn about her choices?
Shouldn’t we be rating household appliances on an efficiency scale? Shouldn’t such rating be regulated, just as the ingredient listing on a can of fish or packet of sausages is regulated? Shouldn’t there be huge duty concessions for the highest energy band? Shouldn’t consumers be told at the point of purchase, this model will cost you so much a month to run, the other one more?
We don’t seem to doing any of this. At the very top end of things, several retailers advertize energy efficient air conditions. But even they do not actually tell us what the power consumption of the model is. If you walk into one of the large home appliances chains in Sri Lanka – there are three big ones – and ask casually or other wise (I’ve tried both) – what the power consumption of the reverent appliance is, you will find that the sales staff are clueless. In fact, when recently at the service center to pick up an appliance, I asked the technician in front of me, at the testing table, what was the power consumption of a LCD TV he was testing. He looked blank. I rephrased the question a number of ways; he looked about the back of the TV and said, ’220.’ Yes he did. He was pointing to a white sticker that said, the appliance was rated for 220-240 A/C. For the uninitiated, the rated voltage of an appliance has nothing to do with its power consumption; if a trained repairmen is as clueless as a sales person on these matters, I am very much afraid the consumer may be quite lost. We really need to do better.
My numbers are rough, and I am skeptical, to say the least, about the great project of consumer capitalism. But that’s where we are. Populist protests mask this because consumer capitalism seems dirty, and unworthy of street protests. I think we need to grow up, and for the time being at least, simply consume smarter.
Commercial Banks in Sri Lanka have registered an upsurge in business in the recent months. In the month of October alone these banks have provided new loans amounting to Rs. 50 Billion, which registers a 20% increase over the same period last year. Loans from foreign exchange banking units have increased by Rs. 5.2 billion to Rs. 156.3 billion.
However, loans to the government from the banking system, including the central bank, have fallen steeply by Rs. 36.6 billion to Rs. 565.5 billion as the government repaid credit following a billion dollar sovereign debt sale.
Credit from the Central Bank to government has also fallen by Rs. 15 billion to Rs. 85 billion.
Last year, loans to private business contracted as the government ran a deficit of around 10% of gross domestic product and banks bought risk free Treasury bills instead of lending to risky private business. Financial sources said that following a balance of payments crisis in 2008 and 2009, banks curtailed credit and were facing rising bad loans. Central bank data indicates that bad loans were now falling appreciably.
With many incentives and concessions given to the private sector in the new budget potential for banks to increase businesses, especially their lending portfolios have increased and business analysts comment that banks have every possibility of getting further strengthened in the future months.(niz).