Politics dominates a year of sluggish growth and it’s “So Sri Lanka”
What a Year! It was So Sri Lanka. We had fun and games in our Parliament. Grabbing the Speaker’s Chair and throwing chili powdered-water has become the pastime of some of our revered politicians. And to think we voted them in. We had two Prime Ministers and one disgruntled and myopic President. And to think we voted them in. Our August assembly at Diyawanna acted truly like GOATs, and this is not an acronym, but the real thing. The idiocy of our politicians has cost the economy billions of rupees in lost tourism revenue and lost foreign investor confidence. We might have lost a few billions of rupees from the Bond scam, but will anyone be held responsible for the financial losses stemming from the political debacle which are many multiples of the Bond fiasco?
Politics and politicians are the biggest threat to our country. What do we do? This is a question all of us must address when we face the ballot box soon.
A couple of years ago, while writing a similar year-ender for the Business Times, I mentioned the fact that Sri Lankans are famous for “missing the bus” mainly referring to our politicians’ knack of failing to grasp opportunities to put the economy and the state of affairs on the right track. The last couple of months have proved that true. We have once again missed the bus. As we look back at the highlights of 2018 in the business world, let’s hope that the New Year will bring change for good in all aspects for all Sri Lankans – on the home front, on the work and business front, and especially on the political front.
JANUARY: 2018 begins with a bang. A poll carried out by the Business Times reveals 82 per cent of the respondents said ‘yes’ to the question: “The Bond Commission’s findings is a fair and independent view of corrupt deals in the disputed bond trades”. However, asked if the Government would take action, 79 per cent said ‘No” or were “Undecided”. How true they were. Arjun Aloysius and his sidekick Kasun Pallisena languish in remand jail while Singaporean resident Arjuna Mahendran remains ‘missing’. If credibility is to be regained by the Government, they must bring closure to this vexed issue. Meanwhile proposed new regulations governing the management of Sri Lanka’s massive debt has a significant provision giving immunity to the Central Bank, members of the Monetary Board and all officers of the banking regulator against prosecution if they act in good faith. What it means is that officials cannot be held liable either for criminal matters or civil matters for performing their duties in good faith. Wow, all you need to say is “you” acted in “good faith” and you go scot free when the goo in the good hits the fan. It did for Finance Minister Mangala Samaraweera who gives permission for bars, pubs and small restaurants to extend opening hours and sell liquor. He also scrapped an archaic law prohibiting the sale of alcohol to women, women being employed in pubs, and also women (a bartender for instance) selling liquor. At last, true emancipation, or so we thought until President Maithripala Sirisena proved a wet blanket by ordering the old laws remain intact. It was the tourism industry which wanted these changes so as to make Colombo an ‘event-friendly” destination. In Vietnam where there is no inhibition on alcohol sales, tourist arrivals increased from two million in 2000 to 10 million in 2016. In Sri Lanka for the same period, tourist arrivals rose from just under a million to two million. These foreigners have a thirst to be quenched. Not here in prude Sri Lanka. It is So Sri Lanka.
Sound of Music
FEBRUARY: A headline in our February 4 edition reads: “Rejection of Government Printer’s bid for e-Passport raises eyebrows”. The bid for the e-Passport facility which was Rs. 650 million by the Government Printer was turned down by the Ministry of Internal Affairs and instead the contract was awarded to a bid from De La Rue Lanka which came in at Rs. 1.2 billion. Why go for the cheap bid when you can line your pockets?
Why go for the bid from a 100 per cent state-owned entity? It was revealed during a fundamentals right case challenging the decision the bid to award it to De La Rue that it was our esteemed Cabinet which had approved the proposal through an unsolicited bid to De La Rue. It also came to light that the Department of Immigration and Emigration had said the cost to upgrade the existing infrastructure to issue e-Passport was only Rs. 50 million. So why all the fuss? Go figure. It is So Sri Lanka. Yes, we live in a mud, mud world as it showed when another tender was called for by the Western Province Road Development Authority to pull one of their excavators which had got stuck in mud in the canal close to the Jaela Bund road bordering the Muthurajawela marsh. This is apparently a case of blaming the machine and not the hands which operated it. Thankfully everything went smoothly at the Colombo Port when ten 40-foot containers bringing the props and costumes, and sound and light equipment for the Sound of Music theatre production was unloaded safely. It was presented by John Keells Holdings which wants to turn Colombo into an entertainment hub. Hurrah. The hills are alive but not with the sweet sound of music, rather disgruntled noises from our tea exporters after Japan and Russia, two of the biggest importers of the bud and two leaves, raise concerns on the use of weedicides in the absence of the popular glyphosate. Russia even went to the lengths of banning Ceylon Tea. A major PR push was undertaken in Tokyo and Moscow to restore confidence in our tea. Nothing like a nice joyride with your sip of tea. Our Business Times Poll reveals that the Mahinda Rajapaksa-controlled Sri Lanka Podujana Peramuna will win the local government elections. We are right.
MARCH: Unsettled by the results at the local government elections, the government allows senior public executives who have served for more than six years to apply for duty slashed vehicle permits. Economists said it was a bid to woo the public sector after a sizeable segment voted against the government. The cash-strapped Treasury was meanwhile pulling its hair out as it stood to lose at least Rs. 65 billion in tax revenue per year due to this duty reduction thanks to the upper ceiling of the vehicle value also being removed. Around 6000 officials were eligible to apply.
With high duty cuts, in some cases almost zero, and unlimited values senior public officials were dreaming of BMWs and Mercs. Meanwhile in India, senior bureaucrats use Maruti Suzukis. It’s not all cruise control in March. Communal violence erupts between Sinhalese and Muslim communities in Kandy. Prime Minister Ranil Wickremesinghe believes the violence in Digana “appeared to be systemic and organised”. Tourists cancel hotel bookings with curfew being imposed. Thankfully order was restored quickly. There is confusion and concern surrounding a tax to be imposed from April 1 on all interest-earning deposits that also applies to foreign remittances. It was introduced by good old Ravi Karunanayake, the Finance Minister then. Key word is ‘then’. No wonder he became the ‘then’ Finance Minister. Hello, hello, amidst mounting pressure from Sri Lanka Telecom workers, President Maithripala Sirisena orders his brother P.G. Kumarasinghe Sirisena, Chairman SLT to take stern action against corrupt officials and streamline operations. The workers were irked by alleged malpractices at SLT since 2008. Allo, allo!
EAP deal
APRIL: The EAP Group enters into a deal with a Singapore-based investment fund resulting in crisis-ridden Edirisinghe Trust Investment Finance Ltd being resurrected with a capital infusion of US$17 million. The EAP Group agrees to sell some of its major subsidiaries to the Singaporeans at a price of $75 million in a bid to protect the deposits of over 35,000 depositors. Life is not a beach for everyone, especially tourists in Mirissa after a violent attack on a group of Dutch visitors, allegedly by a mafia group operating in the area in the guise of beach boys, resulted in the STF being deployed by the Government. The Special Task Force would patrol the area helping out the local police. One of the foreign victims at the Surf Bar and Restaurant in Mirissa – he had apparently tried to stop a group of locals making sexual advances on female tourists, with one local trying to rub his “organ” on a female’s shoulder – refused to appear in court to identify the culprits. You can’t blame him.
Tourism Minister John Amaratunga had suggested using Skype technology to get evidence from witnesses. At last something useful coming from a politician. An Australian company has organised the 2018 International Toilet Tourism Awards for the second year running. Nominations have been invited from across the world. Sri Lanka surely must be a top contender for we know how to shit on everything.
MAY: A Future of Tourism talk-shop in Colombo came up with the idea of giving our tourist police a new wardrobe which will be “less-threatening”. Kavan Ratnayaka, chairman of the Sri Lanka Tourism Development Authority, who suggested the idea, said: “It will not be Armani or any Italian style, but we will get help from Hameedias who will provide the uniforms which will be more attractive and less threatening”. Move over khaki and Miami Vice. Mirissa Vice is on the scene and he is looking hot – that is if he is not wearing shorts. And talking of revamping the image of our security force, the controversial Pentagon-style Defence Headquarters building at Akuregoda, Battaramulla, is fast turning into a white elephant. The project to house the Army, Navy and Air Force headquarters and moving from Colombo was launched in 2011 under the Rajapaksa regime and at an estimated cost of Rs. 8 billion. The project should have been completed this year. Minister of Megapolis and Western Development Patali Champika Ranawaka reveals Rs. 64 billion had been spent so far on this “white elephant” project with another Rs. 100 billion needed to complete it. When the project commenced during the tenure of the former Defence Secretary Gotabaya Rajapaksa, the cost estimate went up to Rs. 20 billion. Money initially came for the project from the $125 million earned from the sale of the Galle Face lands to Shangri-La Hotel. But now funds have dried up. In the meantime, the Forces have been provided with temporary accommodation in 15 rented buildings at an annual rent of Rs. 5 billion. It is So Sri Lanka.
Glyphosate debate
JUNE: The tea and rubber industry gets a new lease of life after the Government lifts the ban on glyphosate weedicide. It would however be made available only through the Ceylon Petroleum Corporation. Glyphosate will still be banned for paddy cultivation. This re-think on the ban apparently came about due to Sri Lanka losing its market share in Japan by about 40 per cent because of poor quality tea exports. The Japanese had replaced Ceylon Tea with Kenyan teas. Sri Lanka exports nearly eight million kilograms of tea to Japan annually. Being hit in the pocket, the Government had lifted the weedicide ban. Meanwhile dairy farmers protested in Colombo angry that they had not been paid for their produce – or rather their cow’s produce for months on end. The dairy farming community visited Colombo, looking amazed at the high-rise buildings sprouting everywhere. The visit proved fruitful with arrears valued at Rs.700 million owed to them being paid.
JULY: There are mixed views over EPF being privately managed, the Indian Airport Authority is set to take over Mattala Airport, the Sri Lanka Airforce’s Helitours is suspended while the gold industry depends on smuggled gold to keep its head above water are some of the topics that dominate this month. In a move offsetting China’s mounting presence, the Indian Airport Authority is set to take over a controlling stake of 70 per cent in Mattala Airport in a joint venture with the Government. The IAA handles 125 airports in India, including 18 international airports. Will it be 19, when Mattala comes on board? Meanwhile Helitours is grounded so that aircraft used for commercial operations could be brought in conformity with civil aviation rules. Helitours had been operating two flights, three days a week from Ratmalana to Trincomalee and then on to Jaffna in the morning, and returning the same day in the afternoon. In the wake of a 15 per cent tax, the gold industry depends on smuggled gold to secure enough stocks for production and selling at a reasonable price by keeping very thin margins Colombo Sea Street jewelers admit. How sweet of them going to this extent to ensure customer satisfaction. It is So Sri Lanka. While the Government is trying to work out a fuel pricing formula a Business Times poll shows that 44 per cent of respondents favour private management of the Employees Provident Fund while 43 per cent did not and 13 per cent were undecided. The unions are demanding a greater role in the management of this piggy bank, which had earlier invested in several loss-making entities in the stock market. Didn’t that man Bond also use EPF money? Using the hard-earned savings of the people to make a fast buck is really bad taste. And talking of taste, the iconic landmark in Bambalapitiya, Green Cabin, is shut down. Opened in the 1930s and owned by entrepreneur Cyril Rodrigo, this restaurant has been popular with customers over the decades. But a family squabble and a lack of consensus on the way forward resulted in the land being sold to businessman Harry Jayawardena. Green Cabin was to be re-opened at a different location. But the chocolate cake will never taste the same somewhere else.
Nuts
AUGUST: Coconut prices soar to around Rs. 69 per nut, reaching three times the farm price. A coconut producer said the middle-man was fleecing the customer. So what else is new? It is Nut surprising. The people’s budget car, the Tata Nano, will not be manufactured anymore by the Indian company, just after a decade since its launch in Sri Lanka. More than 5000 Nanos ply the roads in Sri Lanka and is one of the top 10 models sold in this country for the last four years. But due to poor sales in India, Tata Motors had decided to pull the plug on the Nano and instead start manufacturing the Nexon. DIMO, the sole agents in Sri Lanka for Tata, however assured owners of the Nano that there were sufficient stocks of spare parts for the Nano and would continue its after sale service. So, it is not a case of “tataa”. Drug firms lose millions due to rupee depreciation. Last year, the exchange loss amounted to Rs. 3.2 billion, according to pharmaceutical companies. And in the first quarter of this year the loss was around Rs. 1 billion after the dollar surged to Rs. 160. Somehow, I find it hard to shed a tear for Big Pharma.
SEPTEMBER: The Central Bank clamps down on debt collectors harassing customers. If you have not paid your payments on a leased vehicle on time for example, then no need to worry that tough debt collectors will knock down your door and demand payment – or like in the movies break your knees. Several customers told the Business Times that they had been threatened to repay outstanding payments or face the threat of property, vehicles and other items being seized by licensed finance companies. Come in the Central Bank who has issued guidelines to prevent customers under the Financial Customer Protection Framework. A BT poll reveals that the people are fed up with the constant strikes and protests. These protests and strikes are destroying the country and we don’t know where it will end, one worried respondent said. In Hong Kong, they only protest on Sundays, the rest of the week is spent making money. If we followed suit, then perhaps, there would be no need for debt collectors.
OCTOBER: After a three-year multi-million dollar global campaign, it was finally decided that the new branding for Sri Lanka will be – So, Sri Lanka. The government spent $2 million on the branding and the logo which is to be launched in the UK in November. Sri Lanka had been searching for a new branding since the old taglines were felt to be worn and outdated – ‘Wonder of Asia’ and a ‘Small Miracle’. So, it was decided to go with So Sri Lanka. Catchy and quite appropriate for any occasion. Confusion reigned at three state institutions after President Sirisena asks the directors at the Bank of Ceylon, People’s Bank and the Board of Investment to resign. More confusion follows with Prime Minister Wickremesinghe being unceremoniously – and unconstitutionally as we all knew – being replaced by Mahinda Rajapaksa. Aiyo, Sirisena, what did you do? So, Sri Lanka.
Rupee woes and political crisis
NOVEMBER: The rupee depreciates and international rating agencies Moody’s and Fitch giving the thumbs down are just some dividends of the uncertainty following the widespread political developments. Business leaders and economists jointly decry the chaotic situation. There are fears that the GSP+ concessions offered by the European Union will be withdrawn. Significantly no high-profile world leader sends the customary congratulatory message to Rajapaksa. Only China is happy. Firms in IT and garments start to shift their head offices out of Colombo to Singapore owing to the political crisis, regressive taxations and the general environment for business. So, Sri Lanka.
DECEMBER: The judiciary holds firm. The Supreme Court decides Ranil’s ouster was unconstitutional. Despite promising several times he would never appoint RW as PM, Sirisena is forced to eat humble pie. After almost two months, the political chaos is over. But will this mean things will get back on track and the country will progress? It remains to be seen. Meanwhile there is progress on the maternity front with the Cabinet deciding that one-year no-pay leave will be granted to female public officers to obtain fertility treatment to have a baby. So, Sri Lanka.