ISSN: 1391 - 0531
Sunday March 23, 2008
Vol. 42 - No 43
Financial Times  

Issues: Three-in-One


More than two decades local reporters were virtually persona non grata at the offices of the multilateral agencies like the World Bank, the IMF and subsequently the Asian Development Bank (when it opened its office in the mid 1990s). Access to information was difficult and getting an interview with the country director was completely out of the question. These agencies were sacred cows and the public and the media had to rely on occasional press releases to find out what was happening vis-à-vis Sri Lanka. All that changed in the 1990s and a new openness began with country representatives and their staff being more accessible to the media. What brought that change were the issues of transparency and governance, which the agencies themselves were promoting across the globe in their own funding. Corruption scandals like Enron also triggered calls for more transparency and public scrutiny. That openness has now developed into regular interaction between agencies and the community. In recent weeks, the World Bank – preparing its next Country Assistance Strategy (CAS) to be ready by June – have been meeting various groups in the community including farmers, NGOs and other sections of civil society to find out the ‘real’issues of the people. While the agencies still come under criticism from the likes of the JVP, JHU and the media, this openness and frankness must be applauded and we hope the agencies will further enhance this relationship with civil society. One of the points raised at a recent World Bank interaction with the media was the issue of perception. How do people perceive the World Bank? “Good question,” said the World Bank country representative and promised to take this into consideration in their next report.


A week has past after the new Tax Chief S. Angammana took office replacing the controversial A.A. Wijepala and things appear to be quiet there. The new man has promised to be transparent and accountable but doing so with political pressure and the need to fulfill targets is not going to be easy.

Last year the Tax Department fell short of its 2007 revenue target of around Rs 330 billion by about Rs 20 billion while this year the target is much higher at Rs 410 billion in a situation where business and the economy are not doing well and businesses are also paying high interest rates. If a company was paying Rs 10 million last year in interest that amount has doubled. How does one expect to raise its tax collection in a negative business environment is something the government needs to look at and prepare more realistic targets. Already the Central Bank’s inflation targets are off the mark due to external cost factors like commodity prices and fuel. “The continuous rise in international food prices as well as domestic supply constraints have led to an increase in inflation higher than the expected level,” the Bank said in its latest report on the economy. Given these changes and constant pressure from the Treasury to provide more tax money to fund rising government expenditure, it would be a tall order for the new Tax Chief to meet these targets. The only way he can do it is to arm-twist taxpayers or go after them, which he has vowed not to do. Tough period ahead for Angammana.


The other day, a young radio presenter showed her joy in the number of impending holidays. “It’s going to be a great week with so many holidays,” she said enthusiastically. Everyone loves holidays but that’s one of the reasons why we aren’t growing as fast as we should – apart of course due to the conflict.

The issue of too many holidays has been debated over and over against and business groups and chambers have constantly urged government to rationalise the holidays’ structure and make sure we work more than days than less in a year.

Almost 50 percent of the year Sri Lankans are on holiday taking into account the weekends, statutory holidays and other entitlements. Factories are the worst affected as they close for long periods during the Sinhala and Hindu New Year and productivity is at a low ebb during most of April. Rationalisation of holidays is crucial to the economy and needs to be tackled head-on. On the flipside who doesn’t love holidays, like the young radio presenter says? That may be one of the reasons why we are a smiling race, exhuberant and warm to foreign guests!



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