The somewhat rainy weather had improved on this Thursday morning for Kussi Amma Sera to have her usual under-the- Margosa tree conversation with down-the-lane friends, Serapina and Mabel Rasthiyadu. With Christmas just gone by and New Year looming ahead (three days more), the trio were in an animated discussion about year 2018 that was to [...]

Business Times

Just another day


The somewhat rainy weather had improved on this Thursday morning for Kussi Amma Sera to have her usual under-the- Margosa tree conversation with down-the-lane friends, Serapina and Mabel Rasthiyadu.

With Christmas just gone by and New Year looming ahead (three days more), the trio were in an animated discussion about year 2018 that was to end. “Karadara wediyen thibba mey avurudde (there was too much trouble this year),” said Kussi Amma Sera, referring to troubled periods during the year.

Responding, Serapina picked on the October 26 political crisis, saying, “aparade ratata (it was in vain for the country).”

As the conversation progressed, Mabel Rasthiyadu was heard to say, “ḍdollar-eka vadivena-eka apey maeda peradiga inna lamai-ta hondai (the rising dollar is good for our workers in West Asia)”.

“Ena avurudde monava vei da danne ne? (What do you think would happen next year),” asked Serapina, who often tries to be the soothsayer in the group. Even if she got some of the events in 2018 right – earlier in the year – like predicting the rising US dollar, she and many others would never have imagined the October 26 events in which Prime Minister Ranil Wickremesinghe and his Cabinet were sacked.

Is that all now water under the bridge? In comes Seeni Bola, my banker friend, with his theory of what would happen in 2019.

“Next year will be an eventful one with elections and crossovers galore,” he says over the phone, disrupting my ‘listening-in’ from the office room window to Kussi Amma Sera’s conversation with her friends.

“Absolutely,” I reply. “With so much bitterness between Ranil and Maithri and Mahinda Rajapaksa getting suckered into a political deal that soured, will Ranil and Mahinda combine to call for early general elections?” he asked. He was implying on a possible move by the main parties in Parliament calling for early parliamentary elections through the passage of a motion seeking this with 2/3rds support of the legislature. It appears everyone wants a parliamentary election, which according to the law can be held only 4 1/2 years after the earlier poll or through a motion in Parliament approved by 2/3rds of the MPs.

“I don’t think Mahinda will join Ranil in such an endeavour. Most probably, provincial elections will be held followed by a presidential poll (which must be held before December 2019),” I say, not with confidence though since – given the unexpected political happenings in October-December — anything is possible in Sri Lanka.

2018 in fact has been a roller coaster with the ethnic clashes in Kandy triggering tourist cancellations, the selling rate of the dollar rising to Rs. 183 on Thursday (December 27) from Rs. 153 on January 2 – a hike of nearly 20 per cent, the fuel pricing formula which was temporarily disrupted during the October-December political uncertainties, the revelations at the hearings of the Presidential Bond scam probe and the drop in the country credit rating by international rating agencies owing to the political crisis. Foreign travel advisories meant tourists had to be cautious when travelling to Sri Lanka and within Sri Lanka to avoid political hotspots.

The new Government or the restored one since the Cabinet is made up with the same faces with the same portfolios – viz Mangala Samaraweera as Finance Minister, Tilak Marapana as Foreign Minister and John Amaratunga as Tourism Minister – has a tough assignment on its hands: Restoring confidence with credit agencies and lending agencies (IMF) and coming under pressure to give handouts to the people during an election year.

The Government has three key priorities on the economic front: Immediately renew negotiations with the IMF on its suspended credit facility, the US-based Millennium Challenge Corporation (MCC) which is providing nearly US$500 in free (grant) money, and funding from JICA. These are priorities not only because Sri Lanka needs the money for development but also as international debt payments are looming ahead.

The Central Bank has, however, said it is ready to meet international debt obligations for 2019 with borrowings from the international market on-stream.

The nearly 2-month political crisis completely threw the Government off-gear pressing the brakes on a lot of work – including the presentation of the 2019 budget. More than anything else, these developments put a cap on foreign investment with many investors playing wait-and-see at a time when the country didn’t need such distractions.

However, the power to rule – as reasonable men — was lost amongst the three main actors in this plot: Maithripala Sirisena, Mahinda Rajapaksa and Ranil Wickremesinghe, with each playing their role to prolong the crisis while the country and the world stood and watched. Cost to the economy? Incalculable!

Seeni Bola, continuing the conversation, sees a period of handouts and goodies for Sri Lankans this year with the country being in election mode.

“We have provincial council elections and then a presidential poll which might be even sooner than later. In such a scenario, the President will offer his set of goodies to establish his control over the populace while the entirely UNP-controlled Cabinet will do its own ‘thing’ to woo support for the forthcoming elections,” he says.

Among other developments, the Presidential Commission on SriLankan Airlines has heard some devastating testimony on how officials virtually ran the airline to the ground with financially unviable decisions. Tea, still a formidable mainstay in the Sri Lankan economy, had its own share of problems with an overgrowth of weeds on plantations due to the suspension of the weed killer – Glyphosate. After months of appeal, the authorities lifted the ban saying it would be allowed on tea lands but not for paddy. However, tea producers from regional plantations say it would take at least another 10 years to restore the land to its original, pre-ban status. Exporters to Japan, one of Sri Lanka’s lucrative markets for high-priced teas, faced difficulties as some shipments were returned due to residue in some teas. The cost of shipping teas to Japan has increased owing to the need to undergo multiple lab tests to assure Japanese buyers that the tea is free of impurities.

Given all these developments, economic growth is also seen to be lower than 4 per cent. Our Down to Earth economist in his column below predicts economic growth to fall to 3.5 per cent, below the World Bank estimate of 4 per cent.

So what else is in store for us in 2019? As we stated in the Kussi Amma Sera column on January 7, 2018 all the reports of the Bond Commission will end with a harmless sequel. So would the probe on SriLankan Airlines now that the Government is divided (Sirisena and Rajapaksa on one side versus Ranil and team).

Thus, as we hark back to the past, peek into the future and turn the page to a new year in 2019, it’s the dawn of just another day for Kussi Amma Sera and her friends, and Arthika and Haramanis and their coterie of friends. Best wishes to our readers and may your dreams come true!

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