The Association of Container Transporters (ACT) recently has alleged that a number of BOI Container Transport Companies were hiring out vehicles (Prime Movers and Trailers), used in container transport, to outside parties in contravention of an agreement entered into with the BOI.
The BOI Companies are only permitted to hire out such vehicles as a transport service to BOI firms in the garment and other sectors. "However, some companies are abusing these facilities and hiring vehicles out to outside parties, an ACT official alleged.
"These companies are bringing down our rates by hiring out their vehicles at lower rates and since all our 70 member companies have a fixed rate, they have been severely affected by this high-handed undercutting activity", he said.
He cited the case of a leading cargo cum Container Terminal Company which has purchased dozens of vehicles and is hiring them surreptiously to outsiders.
"Worse still, shipping lines too are being served by these companies in inter-terminal transport, at cheap rates, as a result of which considerable foreign exchange is being lost".
"Such a situation is grossly unjust as our members do not enjoy duty-free concessions for the import of vehicles and spare parts as do the BOI firms".
"There exists a very real danger of many of our member companies facing closure in the near future if no immediate action is taken by the relevant authorities", he warned.
BOI Monitoring Department Manager Gamini Ranasinghe, however, said that their investigations into a complaint received in early June had yielded no evidence that such malpractices were taking place.
"We have received a similar complaint against another leading container terminal firm and we are investigating".
He added that if found guilty, the BOI would initiate action to cancel the agreement entered into with the offending party, with immediate effect.
Cricket stars Arjuna Ranatunga and Muttiah Muralitharan will be leaving Union Assurance Limited, to venture into Insurance Broking Business at P&A Insurance Brokers (Pvt) Ltd.
With over Rs. 150 million worth of General Business and Rs. 3 million worth of Life Business, P&A Insurance Brokers (Pvt) Ltd., hope to appoint Area Development Managers to reach the outstation areas, in the near future, the company said.
Padma Gunasekera, the former boss of the two cricketers, will be the Chairman/Managing Director, while Arjuna and Murali will be Executive Director and Business Promotion Manager, respectively.
Mr. Gunasekera has over 35 years experience in the Insurance industry. He was earlier Executive Director of ACW Insurance and at the time of resigning held the post of Additional General Manager - Marketing at UAL.
The expansion of the IMF’s membership and the adoption of market oriented reforms by a large number of countries worldwide fuelled a rapid growth of IMF technical assistance activity during 1990-94. Since then, owing to budgetary and staffing constraints, the quantity, of technical assistance and training delivered by the IMF to its members has levelled off to slightly more than 300 years of staff and expert time plus some $10 million for scholarships and trainees annually.
The period of consolidation since 1994 has provided an opportunity to reflect on the proper place of technical assistance in the IMF’s work, in particular on the balance between policy and institution building technical assistance and their linkages with the IMF's surveillance work and its support for members’ adjustment programs. Related attention has been given to strengthening the IMF's monitoring and evaluation of its technical assistance. This, in turn, is leading to a re examination of some of the ways in which technical assistance programs and projects are designed and implemented.
These were among the issues explored at a recent Executive Board meeting convened to discuss the report of a group of external experts on the technical assistance provided by the IMF’s Monetary and Exchange Affairs Department (one of several IMF departments providing technical assistance). During the meeting, Executive Directors aired a wide range of views on the role and importance of IMF technical assistance and floated suggestions for further improving its planning and implementation. Board members continued to view the IMF’s technical assistance and training as a natural outgrowth of its work on surveillance and members’ adjustment, programs. Several believed technical assistance should be linked even more closely to country surveillance and program work, although taking care not to make acceptance of technical assistance a condition for approval of IMF support for a member’s adjustment program.
The IMF’s senior management has endorsed this view, describing technical assistance as “one of the three legs of the IMF stool” (the other two being IMF surveillance and financing); it should thus be as robust as the other two legs to ensure the stool’s overall stability.
The Executive Board discussion revealed changing perceptions about the IMF’s role in technical assistance. As a monetary institution dedicated to pursuing stability in the international monetary system, the IMF has always been keenly interested in fiscal and statistical Ñ as well as purely monetary Ñ issues that have a potential for undermining macroeconomic stability.
It is now generally agreed that the IMF’s support for members’’ adjustment programs Ñ and much of its surveillance work Ñ is aimed not only at stabilization, but also at creating or maintaining conditions for sustainable growth (for which macroeconomic stability is an important prerequisite).
IMF staff on program and Article IV consultation missions, and resident representatives Ñ IMF staff based in selected member countries Ñ currently spend a significant amount of time advising governments on required structural changes, the capacities needed to manage structural change, and how technical assistance can support these efforts. Although there is still no consensus about how far the IMF should move toward development related work, the development dimension clearly emerges at the intersection of technical assistance with the IMF’s surveillance and program work.
If current IMF technical assistance activities were still limited, as in the early days, to advisory missions providing policy advice on ways to achieve, or maintain, fiscal and monetary stability, it could be argued that they lack a development dimension. But the IMF now provides a wide range of technical assistance and training designed to develop human skills and institutional capacities in areas of economic and financial management vital to fostering sustainable growth. Indeed, IMF supported programs have taken on medium term perspective and begun to emphasize the institutional and structural weaknesses that need to be addressed if program induced improvements in the external sector are to lead to increased productivity, investment savings, and growth. This has prompted the IMF to take a deeper interest in the need for medium term complementary technical assistance programs that emphasize the development of institutional capacities.
Until recently, it could be argued that even when technical assistance was provided for institution building (for example, to improve tax collection through strengthening tax administration), the goal was not to promote development or even growth but to help achieve macroeconomic stability by closing, or narrowing, fiscal deficits. However, IMF staff have maintained that if fiscal adjustment is to contribute to the long term success of an IMF supported adjustment program, it must be growth enhancing. This implies a careful integration of policy and institution building technical assistance to underpin the objectives of IMF supported programs. It also means an even tighter interlocking between the management of IMF programs and technical assistance.
Recent research on the requisite conditions for sustained economic growth supports the view that the right mix of government policies is key to explaining the differences in economic performance among countries starting at similar levels of development and with similar resource endowments. Paradoxically, this mix appears to require both less and more government: less government involvement in direct economic control and intervention, and more government involvement in indirect economic management that encourages efficient resource use and less waste. The latter requires a set of skills and institutions different from the former. Government involvement in indirect management calls for a greater understanding of Ñ and capacity to use effectively Ñ a broad array of fiscal and monetary instruments; this, in turn, necessitates a greater variety of economic and financial data. More government involvement in indirect economic management also requires an enabling legal and regulatory framework managed impartially by competent professionals with the necessary means of enforcement.
Although the correct mix of economic policies and institutional capacities may appear to be at the heart of the growth conundrum, evidence suggests it is not easy to get the balance right. Producers and consumers in many countries still struggle to react rationally in the face of conflicting government policies and regulations that distort investment and consumption decisions and produce an incentive structure that lowers welfare. Even where governments are ready to take steps to establish the right conditions for a more efficient use of resources, it is not always obvious how they should proceed in the context of an IMF supported program; nor do many governments have the capacity to design and implement the right structural reforms without strong external technical support. As the IMF is faced with mounting pressures to take these factors into account in the design of three year adjustment programs, the demand for its technical assistance in tackling structural and institutional impediments to what the Managing Director has termed “highquality growth” is likely to increase.
The risks of ignoring these issues are great. For instance, if a country liberalizes its financial market before putting in place adequate prudential controls and bank supervision capacity, the banking sector could be destabilized, with disruptive repercussions throughout the economy. Or, for a government needing to undertake fiscal adjustment to avoid excessive reliance on credit restraint to contain inflation, it is not easy to judge the combination of tax and expenditure reforms required to match the short term goal of restraining demand with the longer term objective of promoting growth. In both of these cases, the IMF departments providing technical assistance work closely with the relevant area department and the governments concerned to agree on an optimal mix of policy advice and institution building assistance.
Paying closer attention to the removal of structural impediments to growth and to the role of policy and institution building technical assistance has major cost implications. The resources required for a comprehensive approach to technical assistance are, in many cases, beyond the capacity of the IMF alone, “as they entail setting the right policies and approaches; drafting the necessary legislation and regulations; training large numbers of personnel; designing management information systems to collect, process, analyze, and disseminate data; procuring and installing the equipment and supplies needed to complement the human resource inputs; preparing and implementing public information campaigns; and putting in place adequate monitoring and evaluation systems. These broad ranging tasks pose the question: Should the IMF step up its efforts to enlist the support of other providers of technical assistance, some of which may be better placed to provide inputs on the scale and in the combination required?
In certain individual country cases, the IMF is already collaborating with other agencies Ñ most notably the United Nations Development Program and the World Bank Ñ to take a more comprehensive approach to strengthening economic and financial policy formulation and implementation capacities.
Ensuring adequate internal and external coordination, proper and timely sharing of information, and adequate oversight over project implementation can be nearly as time consuming as delivering and backstopping the technical assistance itself.
The Merchant Bank of Sri Lanka (MBSL) has recorded a net profit attributable to shareholders of Rs. 18.3mn. for the first half of 1996, up from the loss of Rs. 37.1mn. recorded in the first quarter of '96.
"This strong rebound is testament to the restructuring effort taking place and a reflection of its risk adjusted investment policies and strategies. Shareholders should consequently take confidence in the financial stability of the institution and the strength of its asset backed portfolios," the company said.
Trading profits for the first six months at the year were Rs. 4.7 mn but pre-tax profits increased to Rs. 25m helped by other income of Rs. 20.5 mn.
Net income had grown to Rs. 512mn from Rs. 425mn during the first six months ended June 30, compared to the similar period of last year. Although the Bank would make every effort to sustain this growth, it is important to note that any further growth would have to be taken in context of the macro economic activity in Sri Lanka, with particular reference to the performance of capital markets in the ensuing period," a Merchant Bank statement said.
The new buiding project of BOC Property Development & Management (Pvt) Limited in which MBSL was invited to participate, is underway and is scheduled to be completed in early 1997. MBSL Group will move all its activities to the new building upon completion.
Recoveries continue to be difficult and the Bank maintains its constructive strategy with regard to credit repayment in difficult conditions, with negotiations underway to assist clients. However, MBSL has and will be compelled to resort to legal action in cases where bona-fide negotiations have not materialised, the statement said.
The trade finance division has improved recoveries and despite poor stock market conditions, other areas of Corporate Finance have had significant improvements in performance, particularly in the second quarter of this year which the bank said has been better than expectations.
Investments in plantations showed significant upside potential even in depressed capital markets. "We believe that this sector of the economy will yield attractive returns in the medium to long term and continue to be an important factor in MBSL's earning potential, MBSL said.
Despite aggressive marketing and the strong fundamental value of this share, pessimistic market rumours and certain false representations made in some quarters, have gone towards dampening investor sentiment, the Bank said. MBSL expects some development but is confident that as in the plantations sector the share would benefit the bank in the long term, part of this issue were to devolve on it.
"MBSL will continue to adopt strategies, where it will co-relate the dynamic relationship between cost of holding and expected market turnover, with regard to all its portfolios to meet the changing environment. In this context we are confident that our medium to long term prospects remain attractive despite some uncertainties in the short term," the Bank said.
Microsoft Corporation, the $ 8 billion global software leader has appointed Open Systems Technologies (Pvt.) Ltd and Informatics (Pvt.) Ltd. as distributors of its software in Sri Lanka.
"Sri Lanka is a rapidly growing market for personal computer software and Microsoft is committed to working with partners in the country to further accelerate the potential," Micorsoft Regional Director Sanjay Parthasarathy said.
"We are extremely pleased to be partnering with both Open Systems Technologies Pvt, Ltd. and Informatics Pvt. Ltd. to make the entire range of Microsoft products available throughout the country", he said.
Open Systems Technologies Managing Director Sanjeeva Wickramanayake said,"Microsoft will add value to our product portfolio benefiting us and our channel partners. We hope to be able to substantially enhance the availability of Microsoft products through the country through our extensive distribution network."
Open Systems Technologies Pvt. Ltd. is a subsidiary of East West Information Systems Ltd. and has agencies for products like Dr. Solomon Anti Virus.
Informatics Marketing Director Sarath Jayasuriya said, "The tie-up will enable informatics to expand its business horizons and will contribute to the effort of making it easy for customers to procure legal software within the country."
Informatics, which started as a hardware reseller is a leading Systems Integrator in Sri Lanka. The company is an agent for products of Silicon Graphics, American Power Conversion, Tatung Computers. OKI printers, Hayes Microcomputer Products, FACT accounting software, Informix and Fidelio Systems. It is also the sole agent for Siemens Nixdorf Computers in Sri Lanka. Microsoft Corporation has recently announced the formation of the Indian subcontinent region from what was originally the Africa-India-Middle East operation.
Founded in 1975, the US based, Microsoft is the leader in desktop applications, network operating systems and computing platforms applications.
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