Opinion
Dollar Crisis: What aggravated it
by Eng. D. Godage
Total foreign currency reserves of the country were around seven billion dollars at the beginning of 2021 but it decreased to around 1.2 billion dollars towards the year end, even though the Central Bank announced that there was a reserve of three billion dollars. The net foreign assets of the total banking system are said to be a US$ 4.1 billion deficit by 2021 end. Everybody knows the suffering and difficulties the countrymen undergo as a result of the depletion of foreign currency or dollar reserves. Without elaborating on those effects, it is the intention of the writer to examine how foreign reserves depleted so fast.
Politicians, officials, public speakers very often tend to blame every government since independence over the past 70 years for ruining this country, but with regard to foreign debt, it is not applicable. Moreover, the effects of the COVID-19 pandemic were felt globally but other countries in this region did not suffer as much and face such crises like the ones faced by Sri Lanka, so it is no excuse. It is not essential to elaborate on this fact as it is common knowledge. Consequently, the writer makes an attempt to understand how and when it happened. The focus of this discussion is on infrastructure development, and not other debt instruments.
Debt burden since independence
The Oya project implemented around 1948 using local funds comes to mind. Moreover, from 1950 the major port development scheme of Colombo Harbour created the Colombo Port, one of the most modern ports at the time, by 1956 under the leadership of the Minister of Transport and Works, Sir John Kotelawala in the Dudley Senanayake Cabinet, utilising local funds amounting to 110 million rupees. While work was in progress, the ship ‘Gothic’, carrying Queen Elizabeth II, berthed alongside the newly constructed Customs Quay to christen it the Queen Elizabeth Quay (QEQ). Incidentally, the QEQ was buried in the privately developed SAGT or South Asia Gateway Terminals around year 2000.
The Mahaweli Development Project, a massive irrigation cum hydroelectric scheme originally planned for 30 years but telescoped into about six years, was undertaken by the J.R. Jayewardene government using concessionary loans as well as grants. Funds were provided based on a thorough feasibility study, with eminent engineer late Dr. A.N.S Kulasinghe and his team of engineers working as consultants. Resultant benefits are well known and they did not lead to any debt crisis in the country.
Road and railway infrastructure development has been carried out with locally raised funds. After the 2004 tsunami disaster, the Railway Department staff rehabilitated the destroyed line to recommence operations with the least possible delay. It is said that northern rail line improvements carried out later on loans under Uthuru Wasanthaya had spent two to three times the cost.
Since 1980 the country has seen another major development programme in the port sector. Studies had been conducted at a time of increasing demand for container traffic, confirming the urgent need to expand port facilities. The first phase of expansion, requiring US$ 32 million, was funded in the form of a Yen currency loan. The project progressed systematically aided by further loans, through a transparent bidding process. As a result, the Colombo Port was elevated from the global rank of 127 in 1981 to 21st in 1997. These loans were granted only after proper feasibility studies were carried out and confirmation of loan repayment capability, as affirmed by the lending Japanese Agency. Extensive borrowing for project infrastructure became the norm only after about 2000 and not since independence.
Newer debt accumulation
A Sunday English newspaper on March 9, 2014 and May 1, 2016 reported, with details from the External Resources Department, on 28 projects funded predominantly by China Exim Bank loans amounting to US$ 7,671 million, with five-year grace and 10-year repayment periods; their interest rates are not indicated but is supposed to be over six percent. All these projects are said to have been initiated through unsolicited tenders. The same newspaper published a report under the caption, “Normal tender procedure not possible for mega projects: PBJ”. This is a questionable statement. Further examination of the above list shows seven projects, all in Hambantota, totalling US$ 5,054 million, for airport, port, highway extension, railway extension and local road network. None of them seem capable of generating revenue to repay the massive loans even though they have been in operation for around 10 years by now. These loans alone require about US$1 billion per year as repayment, burdening the country, and using up its dollar reserves. During the previous regime the Hambantota Port was given out on a 99-year lease.
Did the Treasury officials who handled these borrowings not see the danger of the debt burden or debt trap and the country’s inability to repay them without adequate future revenue? One can cite the shifting global financial structure and unforeseen circumstances as the reason. But they should have been taken into consideration in any plan. High costs due to unsolicited proposals without a competitive bidding process are also an issue. As for costs, the Treasury Secretary has said that it is the engineers who determine costs. This is not an acceptable excuse.
The Colombo Port South Harbour was found to be an urgent project, and proved viable after an extensive feasibility study by 2001. After producing detailed designs, cost estimates and all implementation requisites, it was not possible to proceed due to lack of funds. The Hambantota Port project was also given high priority by the same government though two feasibility studies failed to show the viability of the project. For the Colombo Port project, the Treasury Secretary advocated commercial borrowing claiming that the lending agency conditions were unacceptable.
In fact, only one lending agency came forward to offer approximately one third of the fund requirement. The Ports Authority managed to obtain very concessionary loan of US$ 300 million in 2006, to proceed with the project, albeit after a two-year delay. The new harbour was completed successfully within the stipulated time and cost while adhering to a transparent tender process. It is worthwhile to note that the lowest cost, approximately US$ 320 million, was quoted by the Korean contractor who successfully completed it, while the next bid was around US$ 570 million by a Chinese contractor. This project seems to be generating more revenue than budgeted.
In fact, the biggest container ship in the world ‘Ever Ace’, with a carrying capacity of 24,000 TEU, berthed in the Colombo South Harbour in October 2021 as it is the only port in the region that could accommodate a ship of that scale, bringing great honour and promoting the Colombo Port.
Most Chinese funded projects that commenced during the past two decades seem now complete and in operation, spread among power and energy, transportation, airport and aviation, ports, irrigation and water sectors. Debt distribution is US$ 1,553 million in power and energy, US$ 3.99 billion in transportation, US$ 232 million in airport and aviation, US$ 1,336 million in ports and US$ 101 million in irrigation. This includes projects indicated by the aforementioned 2016 news item, and subsequent major projects like the Central Highway are not included.
Expensive ventures like the Norochcholai coal power plant costing US$ 1,346 million have helped to meet the country’s energy demands and there has to be a post project evaluation to ascertain its financial gains and loan repayment capacity. Highway projects undertaken on expensive loans do not seem to generate enough revenue to meet dollar loan repayments. Although some benefits accrue, the post project economic and financial evaluations are not satisfactory. The highest revenue on a peak day on the Southern Highway has been 38 million rupees a day. Considering the average annual turnover minus the operation and maintenance costs it could take 100 years to repay loans. Authorities should perform a post project evaluation for the benefit of future planners.
Lessons to learn
This is history but should not be discarded, for the valuable information and data therein demonstrate the actual scenario and resultant repercussions. Decision makers and economic advisors to the government, especially of the Treasury and any other relevant officials could review them.
The debt burden has aggravated the dollar crisis during the past two decades. The COVID-19 pandemic during the past two years is not an excuse as other countries in the region too have faced the same but are performing better. The negative economic growth in 2020 and the considerable dollar debt burden, with the country’s reserves collapsing have not occurred suddenly. Severe import restrictions have made day to day life of the people inconvenient and led to the collapse of some domestic industries.
The worst is yet to come, as warned by the Secretary to the President, delivering a speech in Colombo, as reported by a Sunday English newspaper on 28 Nov. 2021. He was the Treasury Secretary during the past two decades, when China Exim Bank loans were signed to the tune of billions of dollars mostly for white elephant projects, The massive dollar debt seems the root cause of most problems faced today.
Opinion
A paradox of history
There seems to be a striking similarity between ancient Greece and modern Britain. Both countries remain paradoxes of history. Greece was a small city state constantly at war with neighbouring countries. It did not have a big army, but it had considerable sea power. However, Greece was a leading state over the whole of the Mediterranean. In fact, Greece was once a super power in the Western world.
Britain was very powerful in the 19th century. British justice was administered in Africa, India and Ceylon. British factories flourished in many countries and schoolchildren started reading R.L. Stevenson’s ‘Treasure Island’ and the works of Rudyard Kipling. What Ralph Waldo Emerson said in the 1850s is still valid today. He said, “If there’s one test of national genius universally accepted, it is success; and if there be one successful country in the universe for the last millennium, that country is England. It is the best of actual nations.”
In World War I, Britain faced a crushing defeat. Eventually, the British Empire was reduced to a Commonwealth. World War II shattered the image of Britain further. Although Britain lost much of its power, it continued to be an influential country. Even after achieving independence, India retained English as an official language. The British parliament system is well established in many Commonwealth countries. Some people still wonder how England still exercises its influence over the minds of men and women.
Staying power
There are many powerful countries in the world today such as the United States, Russia and China. Although England is not a super power, she has staying power. According to Oliver Wendell Holmes, a good part of greatness is simply being there. For that matter, England has been there for many centuries. So far no other country has been able to defeat her. As a result, sometimes we wonder whether we can have a world without England.
England has had an unwritten Constitution for a very long time. Other countries have emulated her political institutions. The British people have an established church with complete religious freedom. Although there are social classes in Britain, there has been no major clash among them. Unlike in many other countries, there are only two leading political parties in England. When the Labour Party is in power, the government is not subservient to labour. Similarly, when the Conservative Party is in power, the government is not conservative.
Most British colonies in the East including India and Ceylon did not sever the cultural and emotional links with Britain and retain them even after achieving independence. India became independent in 1947, but she decided to retain English as an official language. By doing so, India produced a number of English writers such as R.K Narayan. However, Ceylon did not give English any official status and treated it as a link language. As a result, students paid less attention to learning English. They were made to understand that everything can be done by learning Sinhala and Tamil. We have failed to produce English writers in the calibre of J. Vijayatunga who wrote ‘Grass for my feet.’
Politically shrinking
The United Kingdom is politically shrinking. However, its influence vibrates throughout the world. English has brought many nations together. There is a common understanding among countries that share the English language and literature. William Shakespeare’s dramas are staged in countries such as China where English is not an official language. People have come to the conclusion that English has become a broker of ideas and institutions.
England is not an aggressive country. However, if provoked, it can deliver a mortal blow to its enemy. British Prime Minister Margaret Thatcher showed her mettle as the iron lady. Britain held the fort against the might of Napoleon Bonaparte who ruled France. The country can still boast of a heavy moral credit. The British stick to their international agreements. The power of England draws mainly from its language. British people say ‘It’s right’ when it is right’. When it is not right, they say, ‘It’s not right.’ Meanwhile English occupies a pre-eminent place in world languages. All the research work in many parts of the world is available in English. You can learn any subject easily through English.
Apart from the language, people respect British standards which are technical specifications and quality benchmarks developed by the British Standards Institution. The United Kingdom’s independent national standards body was established in 1901. It maintains over 37,000 standards covering industries such as construction, manufacturing and technology ensuring safety and reliability.
British English
Standard British English is the variety of English that has undergone codification to the point of being socially perceived as the standard language associated with formal schooling, language assessment and official print publications. For historical reasons dating back to the rise of London in the ninth century, the form of language spoken in London and the East Midlands became the Standard English used in schools, universities, literature and law.
British English functions as one of the two major foundational and standard varieties of the English language alongside American English. It serves as a primary reference point for spelling and grammar. It acts as a global standard, and international institutions are often defined by specific pronunciation.
Most Sri Lankan doctors primarily move to England for postgraduate training, higher specialisation and better career prospects. They are driven by superior training infrastructure, world-class facilities and globally recognised qualifications.
To sum up, when you think of learning an international language, there is no alternative to English. If you wish to read literature, you cannot ignore eminent English dramatists and poets such as William Shakespeare and John Milton. Many leading Sri Lankans like S.W.R.D. Bandaranaike were Oxford University products. Therefore, English deserves to be made an official language in Sri Lanka.
By R.S. Karunaratne
Opinion
State Literary Awards only for the rich?
The Department of Cultural Affairs has once again called authors, and publishers to lodge their entries for selection of the prestigious State Literary Awards 2026.The criteria and conditions required and notified in the public domain, makes it mandatory for the literary work to be printed and published prior to submission for consideration of the awards. There is absolutely no provision for writers to submit their work in Manuscript form.
Where does that leave the financially impoverished writers who are talented, creative and wish to submit a well edited typescript of their work as manuscript for consideration of the State Literary Awards? In a literary environment that encourages a proliferation of self-published books of all forms and features presented by vanity publishers who have their eye on the purse of the author than on literary merit and artistic excellence, it is easy to show that you are an ” established writer” by spending your cash abundantly towards glossy covered books which the printing industry and fawning publishers will lap up with greed.
Even the Gratiaen Prize in Sri Lanka, sponsored by world-renowned Michael Ondaatje allows for Manuscript entries together with published books. Significantly, the manuscript entries that win the prize are assisted to publish their work which is part of the winnings. Many a young, aspiring writer with little funds who won the Gratiaen Prize on merit, but had submitted their entry in manuscript form have been thereby encouraged to submit their work on merit basis only.
It is a fact that the Commonwealth Short Story Prize, a massive state-supported initiative across 56 nations accepts only unpublished short fiction. Further, several countries in the world have established national or state level literary prizes that specifically accept unpublished manuscripts to provide equity in discovering new talent and supporting national literature without bias or favour. In Australia, Jamaica, Philippines, major national awards organised by the State for literature, specifically accept unpublished manuscripts for consideration.
Let’s face the truth. The printing costs are escalating. There is little demand in Sri Lanka for literary work in the English Language in particular. Traditional Publishing where the literary work is reviewed and assessed for talent and creativity and thereafter published is seldom found. The reviews and critical analysis of literary works are rare. But publishers make a pile by pandering to the vanity of aspiring writers who have the financial clout to pay their way through to being featured in prestigious award ceremonies and accolades. Thereafter, their substandard works get a further fillip by bearing the label of “Won the State Literary Award for Literature”! It is a cycle of literary charlatans and their pimps in the publishing industry for whom the price that is paid for publishing and not Meritocracy is the sine-qua-non.
Is this the level playing field promised by the NPP Government and their Marxist protagonists? A government that was voted into power on the platform of affording fair opportunity and equality seems to discriminate in favour of the Haves against the Have- nots in the cultural department to say the least! Anil Fernando
Opinion
Delivering on English
English literature offers a rich heritage of wonderful ideas and thoughts. The reader can be intellectually uplifted. It brings refreshing new vistas and stimulating new ideas. However, this English literature has to be first introduced to the student in order to fire up his or her interest and be made aware of this rich source of culture. Students of basic English as a second language work hard and learn all the hum-drum mechanics of the language, for which they get tested and graded. But importantly, nae crucially, this should be followed up with intellectual rewards for the students’ efforts – which, of course, is the enjoyment of the works of literature of the many great writers in the English language. This is the great payoff, the great dividend for all their efforts but this, apparently goes missing.
One of the obvious reasons for the lack of “follow through” may be lack of time allocated in the curriculum – or, perhaps, more darkly, the teachers’ own lack of knowledge of the great range of good reading materials produced by the countless generations of literary geniuses who have gone before. Such writers have laid down for us a heritage of glorious literary works in books and essays, all of which are to be found in any good library. It is thought that much of this good literature ought to be introduced to all students of English, “full stop,” as part of developing a knowledgeable and cultured society. (Isn’t that what we want?) Reading English literature should bring an intellectual enrichment to all those willing to drink from this Bacchanalian horn of plenty.
It must be said finally, that it can be fairly expected that most young people, especially those learning English as a second language, are totally unaware of the many outstanding pieces of writing that propel English to stand tall amongst the rest. That is, students need to be first introduced to great writings and have a spark of interest ignited in these great works of literature.
For example, by being introduced to “Daffodils,” a short descriptive poem by William Wordsworth, the student can get some very pleasant ideas to think on.
Do not overlook Conan Doyle’s “Sherlock Holmes” detective stories, each one captivating the reader’s attention right to the end. It is by these short stories that the novice reader can first consolidate his power of reading.
For light reading Jerome K. Jerome’s book “Three Men in a Boat” is suggested. On one occasion he goes to the library suffering from a slight hay-fever (allergy) seeking a cure. He consults a book, “Lexicon of Pharmacology”, and recoils in horror as his symptoms fit most of those diseases described in the book! He concludes he cannot live much longer and staggers home to rest and recuperate! This is a well related tale in the book – although seemingly quite implausible!
Similarly, by having the poem meanings explained, e.g. “What is Life if Full of Care?” by William Henry Davis – how he regrets that we humans are always in a hurry, too busy to notice or see the delights of nature, and scenes of natural beauty, e.g., a young woman’s smile as she passes by; we have no time to make friends and even kiss her. Regrets! Explaining this to students would bring a certain intellectual insight.
John Keats’s poem, “Ode to Autumn” is another great work describing the ripening fruits of the autumn season and how nature as a living being, brings to fruition all the good things of a rural landscape quietly humming with warmth after a hot summer.
Again, it is likely necessary to explain to a young, Sri Lankan mind the meaning of the descriptive poetry found in this magnificent poem.
This is the real English to be tasted and then swigged at lustily in pleasure and satisfaction, not some writing airing historical grievances for children to study!
1970 British Cohort Study
It should be observed here that the ‘1970 British Cohort Study’ followed 70,000 people to examine various aspects of their lives. One result discovered was that if a young person reads a lot, it develops his/ her general intelligence no-matter his parents; it makes him smarter.
It was also noted that reading brings life-long benefits; it improves mood, it helps with social skills, increases empathy, reduces anxiety, protects against depression and slows brain decay, the study found.
But these days many young people never gain a great competence in reading English; the fear is that standards are falling. This is bringing poorer critical thinking, less depth of personality and less empathy for others which has the result of a more turbulent society.
People are urged to switch off their headphones and read more of what they like – try reading the newspapers!
Priyantha Hettige
-
Life style2 days agoMarriot new GM Suranga
-
Midweek Review6 days agoA question of national pride
-
Features2 days agoMonks’ march, in America and Sri Lanka
-
Business6 days agoAutodoc 360 relocates to reinforce commitment to premium auto care
-
Opinion5 days agoWill computers ever be intelligent?
-
Features2 days agoThe Rise of Takaichi
-
Features2 days agoWetlands of Sri Lanka:
-
Business15 hours agoMinistry of Brands to launch Sri Lanka’s first off-price retail destination
