Lanka Walltile pays tribute to exceptional salesmanship
Sri Lanka's economy is in a "state of paralysis" and for the first time in many years the country is heading for zero growth due to mismanagement of the economy by the former regime, Finance Minister K.N. Choksy said last week.
He told reporters, during a comprehensive briefing on the country's economic situation, that while the government would try to cushion the impact on the cost of living, it would take at least a year to turnaround the economy.
"An examination of the economy has revealed an alarming state of affairs caused by gross political mismanagement of the country's finances," the minister said at the new government's first complete disclosure of the state of the finances in the country. The press conference was held on Sunday, December 23.
The United National Front ousted the People's Alliance at the December 5 national election and in the process inherited an economy that has seen dismal growth and lower export earnings amidst chronic mismanagement.
But Choksy assured the country that the government would "get on with it" and not spend time, unlike in the past, in finding fault or blaming others for the problems. "The public should, however, be made aware of the real situation. Nothing would be hidden."
Some of the problems are as follows - economic growth this year down to 0.06 percent from 6 percent in 2000, revenues falling by Rs. 30 billion, losses incurred by the Ceylon Petroleum Corporation, the Ceylon Electricity Board and the Cooperative Wholesale Establishment amounting to over Rs. 50 billion, subsidies on flour, gas and petroleum costing over Rs. 4 billion a year, budget deficit rising to between 12 to 14 percent and outstanding public debt of Rs. 1,400 billion which is equal to the value of the gross domestic product.
"We have inherited a minus balance sheet. This is a serious financial situation which has to be arrested as early as possible," Choksy said.
He said the government's immediate solution is to use unutilised foreign aid totalling several millions of dollars as a means of stimulating economic growth.
The government, he said, was establishing an Economic Reforms Council that would include private sector representatives to advise the government on policy measures.
The minister said the government would re-negotiate an IMF standby facility that has been on hold since November due to the failure of the previous government to keep to budget targets.
Meanwhile, Prime Minister Ranil Wickremesinghe told reporters, after a visit to India, that Indian investors were ready to invest in Sri Lanka's power sector.
He said economic discussions with the Indian government included prospects of promoting tourism, increasing flights between India and Sri Lanka and liberalising visa procedures.
On the WTO, he said Sri Lanka would like to work with India to have a common approach to problems facing developing countries especially in agricultural policy. On tea, the prime minister said both countries would cooperate in a marketing plan to capture a bigger share of the world market.
Mr. Wickremesinghe said he held talks on allowing Indian and Sri Lankan companies to have double listings – to be listed both on the Bombay and Colombo stock exchanges.
The popular CIMA business quiz got underway yesterday (Saturday, December 29) at the CIMA Sri Lanka auditorium with the preliminary rounds being held.
CIMA said in a statement that this year too a keen and close contest is expected with eight teams from top CIMA tutorial colleges and audit firms battling for honours.
They include last year's winners, the Academy of Business Studies, Colombo Business School, Wycherly Business Academy, Mercury Institute of Management, KPMG Ford Rhodes, Pricewaterhouse Coopers and Ernst and Young.
The semi-finals of the quiz would be held from 3 p.m. onwards today while the finals of the contest would be held in January. The finals would be telecast.
This quiz competition is being organised for the sixth consecutive year by the CIMA Students' Society (CIMASS), the elected representative body of over 8,000 CIMA students and passed finalists in Sri Lanka.
Picture shows the team captains (standing) at the briefing held recently with the president and office bearers of the CIMA Students' Society.
Seated (left to right) – Mahesha Weeraratne, (secretary (CIMASS), Rajeev Amarasuriya, (president, CIMASS), Hilary Hassen, (project coordinator) and Surekha Jayasinghe, (deputy project coordinator).
Standing (left to right) – Imran Hamid, (Ernst and Young), S. Muhunthan, (KPMG Ford Rhodes), Chanakya Dissanayake (Mercury Institute of Management), Sanjaya Mohottala, (Academy of Business Studies) and Irushi Ratwatte, (Pricewaterhouse Coopers).
A Rs. 100 million dividend declared by Chilaw Plantations Ltd, in which the Treasury is the sole shareholder, helped to fill badly depleted government coffers.
This is the first ever dividend paid by the firm which owns state coconut lands in the Chilaw-Puttalam belt.
"The Treasury took the money," an official said.
"The government was badly in need of cash." Two Treasury officials serve on the board of directors of Chilaw Plantations, which declared the dividend from its cash reserves of Rs. 250 million.
The new United National Front government has described the Treasury as being bankrupt.
Chilaw Plantations is managed by Wayamba Plantations who are also managing agents of Malwatte Valley Plantations, which owns 20,000 acres of prime tea lands in Uva.
Wayamba Plantations received a management fee of around Rs. 10 million last year.
Chilaw Plantations chief executive officer, W.L. Bogtstra said the company is "one of the most profitable plantations in the country, irrespective of crop."
Chilaw and Kurunegala Plantations, both cultivated with coconut, were the only two regional plantation companies that were not privatised.
The new government had indicated it would go ahead with the privatisation of these two firms.
Chilaw Plantations also paid each worker a profit bonus of Rs.21,565 last year.
SriLankaFirst, a business and chambers' group promoting peace, last week welcomed the Christmas eve ceasefire between government troops and LTTE fighters.
"This decision will go a long way in creating an atmosphere conducive to the peace process. It is an extremely significant step in starting the rebuilding and rehabilitation process," noted SriLankaFirst President Jagath Fernando in a statement.
"It is our sincere appeal to all concerned to support the government at this time of need and work together in building a brighter, stronger future for our country and our children."
Prime Minister Ranil Wickremesinghe, during his Indian visit, told reporters that there was a strong possibility of the one-month ceasefire being extended.
Fernando said that the new government's willingness to listen to the sentiments of the community on peace is "sure to instill a sense of hope and optimism in the future of our country."
SriLankaFirst launched its campaign last September to educate civil society on the devastating cost of the war and to urge all political parties to reach a consensus on the peace process.
