Colombo, the capital is going to be split up into an “old city” and a “new city”. That’s according to the Urban Development Authority’s plans published last week by this newspaper, with the Port City being the new city. That Beijing applied further pressure recently to fast forward the completion of the project when the [...]


A ‘new city’ and its all-powerful Commission


Colombo, the capital is going to be split up into an “old city” and a “new city”. That’s according to the Urban Development Authority’s plans published last week by this newspaper, with the Port City being the new city.

That Beijing applied further pressure recently to fast forward the completion of the project when the Colombo Government had to ask for loans and swaps to tide over its debt issues, is much talked of in official circles.

The project has now come under the Presidential Secretariat and early contracts have already been doled out to hot favourites of the Government. It is the Government’s hope that investors would flock to the new Economic Zone bringing in the foreign exchange it is desperately looking for. Chinese investments itself that the Government seems to target would hopefully bring in USD one billion.

With normal local laws such as labour, banking, foreign exchange and tax reset to attract would-be investors, it seems a replay of what the then President, J.R. Jayewardene, said when he opened the country’s first Free Trade Zone almost 40 years ago; “Let the Robber Barons come”.

Even citizenship laws are being looked at to attract capital that the Government hopes will give 130,000 jobs to locals. Several questions arise, however. Will the new all-powerful Commission that will license both financial and non-financial services and be the regulator for wholesale and private banking currently regulated by the Monetary Board have required skilled professionals in the fields of Financial Services, Banking and Investment Services? Will the Central Bank surrender its supervisory role as a banking regulator especially in regard to the inflow and outflow of foreign currency? And will the Commission adopt a “No questions asked’ policy” also sidelining other regulators like the Insurance Regulatory Commission, the Registrar of Companies and the Securities Exchange Commission (SEC)? The draft law provides for this supra commission to do all this regulatory work in ‘concurrence’ with the other regulatory bodies — which means the established bodies play largely a consultative role.

Invitations to local entrepreneurs to join with prospective foreign investors in joint ventures would see dummy companies being set up to exploit and benefit from the relaxed laws in the Zone. ‘Tax Arbitrage’ (taking advantage of tax laws) seems ex-facie, a violation of the Inland Revenue Act.

Litigation within the Zone is going to be within the Sri Lankan legal system with a separate dispute resolution mechanism under the Arbitration Act. Given Sri Lanka’s chronic laws’ delays, how third parties, especially those abroad will view this remains to be seen.

The new Commission is to handle the multifarious subjects like water supply, drainage, sewerage and electricity. Will it have separate departments for each? The Colombo Municipal Council has nearly two dozen local laws ranging from food standards and safety, even quarantine like was necessitated  by COVID-19, street lighting, garbage clearance etc., under its wing, all of which will now come under a Commission in the new city.

A nagging question is that if the Constitution states that every area of Sri Lanka must be administered by a local government authority, unless the proposed new Constitution provides for this exemption, the new city, some might argue, is outside its scope.

Every country is calling for foreign investors. Iran last week signed a pact with China for USD 400 billion worth of prospective investments. Bangladesh last week offered free vaccines on a priority basis for foreign investors. Clearly, this new city will not be the only girl on the beach, as the saying goes, but there seems to be no other way forward for a country on the verge of a foreign exchange crisis.

‘You are what you eat’

Among the many memes doing the rounds on social media these days is one that poignantly portrays the plight Lankans find themselves in: a shortage of turmeric for the traditional Avurudu sweetmeat, kokis; toxic coconut oil for the kavum; and the lack of trees for the koha that heralds the traditional New Year this coming week. As if that is not bad enough, there was a sudden ban on palm oil that threw the cake and biscuit making small enterprises into a spin. It encapsulates the somewhat despondent backdrop to the upcoming festive season already marred, for a second consecutive year by the persisting COVID-19 pandemic.

Hot on the heels of a sugar import scam came the horrific contaminated coconut oil import saga. It is symptomatic of the larger issue of food poisoning by unscrupulous traders. The system of verifying consumer products, especially foodstuffs in daily use in every Sri Lankan household is so enmeshed  in bureaucratic rigmarole and so convoluted are the archaic laws that traders get away with impunity. The ‘Big Boys’ dealing in these items, from soon-to-expire foodstuffs to adulterated arrack have the politicians in their pockets so they know all the froth and fury at the time of discovery soon amounts to nothing. It is business as usual for them.

In the meantime, cases of cancer and other diseases are on the rise among the citizenry directly attributable to these phenomena. Smaller fry are arrested from time to time. There was a classic case not too long ago of an Anuradhapura trader who used dye to turn white rice red being fined Rs. 100 for his crime. That is the law that is prevailing.

While the coconut oil incident remains unresolved for the third week running, the SLSI is refusing to release the list of local manufacturers whose products are compromised with poisonous material. There is no shortage of agencies looking into this matter. Apart from the SLSI, there are the Customs, Police, Public Health Inspectors, the Government Analyst, Municipal Councils, the Consumer Affairs Authority, the Food Control Administrative Unit of the Health Ministry, the Coconut Development Authority, even the courts — all in it and yet, it has exposed a huge lacuna in the chain of responsibility. In the United States, for instance, there is just one Food and Drug Administration. A state minister told Parliament this week that of some 7,200 items imported to this country 5,800 are not even checked but released to the local market.

The name of the game in Sri Lanka is “passing the buck” — each government agency passing the file to someone else, and the trader passing the baksheesh around. The victim, on the other hand, i.e. the average citizen, has to grin and bear, hoping he or she has not consumed the carcinogenic chemical aflatoxin with their food.

When they take a bite of their favourite sweetmeat this festive season, if they can afford it in the first place with green gram at Rs. 980 per kilo for the mung kavum, kokis at Rs. 20 per piece and Orid dhall at nearly Rs. 3,000 a kilo for the ulundu vadai, they will also have to worry additionally, if it is safe to swallow.



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