Government statistics confirm that the Cost of Living index on food has risen by 10 percent in the 18 months this Administration has been in office. Some will contest these figures, but only that they are too conservative; prices have shot up way above 10 percent. Whatever the statistics may be, the sporadic but snowballing [...]


Economic management under attack


Government statistics confirm that the Cost of Living index on food has risen by 10 percent in the 18 months this Administration has been in office. Some will contest these figures, but only that they are too conservative; prices have shot up way above 10 percent.

Whatever the statistics may be, the sporadic but snowballing protests seen throughout the country in recent weeks, from farmers to fishermen to transporters to housewives indicate that the ordinary folk are beginning to take to the streets to vent their anger and frustration. And this, despite the lockdowns due to the COVID-19 pandemic.

The media have been increasingly highlighting homes with empty cooking pots and depleted larders. But Government policy seems more and more misdirected, seemingly compounding a developing crisis resulting in greater hardships for the people than necessary.

The Government has conceded that the economy is in bad shape despite the mutterings of some pundits. It was a hugely significant admission on the part of the Government that the increase in the prices of fuels was partly due to ensuring that the banking system will not collapse. That may be a good reason to justify the price hike and bring the people up to speed with the realities of the state of the economy. Whether it sent the wrong signals to the world at large about the financial situation of our banks and with it driving away prospective investors is another serious issue.

The issue of servicing our foreign debts is a separate matter. The country’s reserves have fallen to a dangerously low level of 4 billion dollars.  We will be paying back a loan of 1 billion dollars taken in 2011 by the end of next month to international lenders. Basically we may end up in a foreign exchange liquidity crisis stemming from the state banks as well as the Government.

The oil price jolt has to eventually filter through the whole economy and the imposition of the fertiliser ban together will surely add a further round of price increases before the end of this year. It may well become intolerable for people faced with keeping their home and hearth burning now.

To meet at least the local challenge, the Government is able to print money. Printing money beyond a threshold is bound to cause inflation. The Central Bank states inflation went up by 0.6 percent from April to May alone. When the purchasing value of the Rupee drops and in a stagnant economy where pay cuts are in motion, it is as always the fixed low-income earner or the daily wage earner, and the poorer segments that take the hardest blows.

It is the bottom 40 percent of the population that is taking the brunt of these hits –and right where it hurts most, the stomach. Whether Government policy is aggravating the problems is the question. The ill-conceived fertiliser ban-plan; the sugar scam; the spike in rice, vegetable and fruit prices have combined to give a negative image of Government’s economic management.

In the midst of it all, the people are being asked to tighten their belts while politicians only want to tighten seat belts of plush vehicles. A hike in gas price has mercifully been put on hold, but now milk product importers are calling for an upward revision of prices. For how long can the Government resist? The competence of the Government’s financial wizards is no longer under scrutiny, it is under attack.

The seafarer; shipping; safety

Among the multitude of days dedicated for one thing or the other, this week (June 25) saw the International Day of the Seafarer recognising those who sail the seas on work and their contribution to our everyday life.

For an island nation like Sri Lanka, seafarers play a vastly significant role, being responsible for the inflow of medicines, food, fuel and the outflow of our produce; in short, they are a lifeline of the nation.

In the last few weeks, however, a fire on board a vessel plying through Lankan waters made all the news for the wrong reasons. It riveted attention on a corresponding subject; shipping.

While the seafarers on board that capsizing vessel were thankfully rescued, public focus zeroed in on the safety measures adopted at the country’s main harbour, the Port of Colombo. Questions emerged as to how much worse the situation would have been to the already catastrophic damage caused to the environment, marine life and the livelihoods of fishermen, had the vessel toppled over in the outer harbour area where it had been in anchorage for five days and spilled its belongings into the sea. The Colombo port could have been blacklisted by shipping lines even if temporarily, if they feared floating jetsam and containers embedded on the shallow seabed could damage their propellers and hulls.

The parent company of that vessel blamed ‘bad packaging’ at a distant port for the leak of nitric acid that started the fire. An increasing numbers of large container ships, luxury cruisers and feeder vessels, some under questionable registration – flying Liberian or Panamanian flags, careless packaging, unseaworthy vessels and inexperienced crews are all out there. Sri Lanka is not only a port of call, but a ‘port of refuge’ for distressed ships. For how much longer is the country going to rely on calling the Indian Coast Guard for help in emergencies rather than engage in her own capacity building at home? Last month’s incident, and the one off the south-east coast last year where a supertanker carrying oil was engulfed in a fire, are wake up calls for a Government that is keen on promoting Sri Lanka as a maritime hub, safe for seafarers and shippers alike.

Millions of other seafarers, the humble fishermen, are seemingly excluded from this commemorative day. While in these parts their prayers for succour and safety are to St. Anthony, the Government must heed their current suffering in the wake of the shipping disaster that has hit their livelihood hardest.


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