Opinion
Sri Lanka’s economy measured in endless queues
World’s first all-organic farming nation faces worst-ever crisis
By Faraz Shauketaly
There are queues for petrol, diesel, gas, kerosene, etc. Husbands, wives and children wait in separate queues. Sri Lankans have no time for work. About 62% Sri Lankan workers are daily wage earners. Properties of some members of Parliament have been destroyed by mobs. Frustration has reached unprecedented heights – not even the dark days of a 33-year-long civil war produced so much frustration among Sri Lankans, who are at the end of their tether. People are calling upon President Gotabaya Rajapaksa to go home.Tourism – a US$ 4.5 Billion industry pre-Covid-19 – has been badly hit. Says the owner of a niche-boutique hotel in Negombo, a well-known tourist resort area close to the Bandaranaike International Airport: ‘Sri Lanka is full of bad luck. Our industry was doing well and the euphoria of a government elected to curb corruption and increase transparency in 2015 saw our occupancy levels go through the roof. Things were looking up. Banks were happy to fund expansion and we were happy. Now we face ruin. No help at all from the government, except a moratorium on loan repayments. Two years later the banks are asking us to start repaying. We have had the Easter bombings, then as we were emerging from that, CV-19 struck. Coping with that, the government went all organic on cultivation. Our industry was barely able to produce US$ 100 million this year and government income plummeted. Today my hotel is near-empty, bank interest rates are rising, the rupee has depreciated over 100%. It is chaos’.
On the campaign trail in 2019, Gotabaya Rajapaksa, a military man turned bureaucrat, largely credited for steering the armed forces to a crushing victory over the much-dreaded LTTE, in 2009, promised to take Sri Lanka in a different direction. After his victory at the 2019 presidential polls, with a whopping 6.9 million votes, he proclaimed an immediate ban on the imports of agrochemicals.Farmers were aghast knowing that a shift to organic farming would require their lands to remain uncultivated for at least three years. They took to the streets across the country, thus fuelling protests in urban areas, including Colombo.
It is argued, in some quarters, that President Gotabaya was told that the financial position in terms of foreign currency reserves made it impossible to spend as much as USD 400 million, on chemical fertilisers. The government put into action an audacious plan to mislead the public on the real financial position in the hope that funds could be raised subsequently for the purchase of fertiliser later, and crop decreases during the Maha and Yala seasons would be manageable. This misadventure saw the Sri Lankan economy nosediving. Diminishing foreign reserves were used to settle a sovereign bond payment to the tune of USD 500 million despite calls from Opposition members to go for a rescheduling of debt before the country had to default.
Little surprise the people are now calling for a government without the members of the Rajapaksa family. The entire Cabinet, save the Prime Minister Mahinda Rajapaksa, had to resign en masse. Protesters were not happy with that response. They wanted President Gotabaya also to resign.One of President Rajapaksa’s confidants, Ali Sabry, was appointed as Finance Minister but his visits to the IMF did not yield forex needed for the purchase of petrol, diesel, kerosene, cooking gas and heavy fuel for power generation.India stepped in with immediate relief, Indonesia sent medicines. Immediate neighbours including Bangladesh answered Sri Lanka’s plea for assistance.
Thanks to the callous treatment meted out to the Muslim community in the past, oil-rich West Asian nations did not offer any help. Other nations were willing to send humanitarian assistance but remain concerned about Sri Lanka’s failure to address allegations of war crimes, accountability, return of lands and reparations despite repeated almost annual assurances to the contrary, the international perception and that of the Tamil community being that ‘nothing’ has been achieved.The appointment of a Prime Minister who has served no less than five times previously has been made out to be an interim measure to defuse tensions. However, the people are protesting opposite his residence as well. A well-read man, with a reputation for political survival, Ranil Wickremesinghe was immediately perceived as a man wheeled in by the principal puppeteer Basil Rajapaksa to create a ‘safe exit strategy’. It was interesting that there was no reference to an ‘honourable’ exit.
The attempt to portray Wickremesinghe, who lost his own seat at the last general election but entered parliament with via the National List thanks to Sri Lanka’s quirky electoral laws – as a national-consensus appointee to forge a broad alliance of all political parties, fell by the wayside when the Leader of the Opposition – another dynastic politician – Sajith Premadasa refused to be part of any government unless a timeframe was set for President Rajapaksa’s resignation.Sri Lanka’s economy is in grave danger with government debt amounting to approximately US$ 32 billion (private sector debt being approximately USD 18 billion) and foreign exchange inflow becoming scarce.
The IMF is still perusing Sri Lanka’s proposals, and so is its former colonial master, the UK, before deciding on some assistance. The Rajapaksas’ leaning towards China has been frowned on by the West, and there is little doubt that there is international pressure – covert perhaps – for President Rajapaksa to resign.The future appears uncertain not only for the Rajapaksa dynasty but also for the people, who are worried about a looming food crisis come August 2022 whoever will be in power – the Rajapaksas, Wickremesinghe or anyone else.
Opinion
Is AKD following LKY?
by Chula Goonasekera
Rev. Dato’ (Sir) Sumana Siri
We, the citizens of Sri Lanka, have already witnessed significant reforms in governance under AKD’s leadership. This personally led process must continue consistently, free of bias, and within the framework of the law to ensure sustainable governance by the State, not the individual. Such efforts will help minimise the waste of public funds and lay a strong foundation for the nation’s development in the long term. We often look to Lee Kuan Yew (LKY), Singapore’s founding father, as an example of transformative leadership. He united three diverse ethnic groups—Chinese, Malay, and Indian—under the principle of honesty. Today, Sri Lanka faces profound challenges from past political corruption, economic instability, and social divisions. LKY’s leadership serves as a reminder that integrity, accountability, and a commitment to the greater good can redefine a nation’s destiny, regardless of its size or resources, similar to Singapore.
When Singapore gained independence in 1965, it was a small, resource-scarce nation facing political unrest and ethnic divisions. Yet, within one generation, it became a global financial hub and a first-world country. LKY’s leadership was pivotal, centred on three core principles: meritocracy, integrity, and pragmatic governance. He prioritised national security, social cohesion, and economic growth. His efforts to foster ethnic harmony included implementing bilingual education policies and enforcing anti-discrimination laws. Similarly, AKD should consider enacting legislation to prevent racially motivated demands, i.e. anti-discrimination laws, to safeguard the government from evil, selfish minds trying to destabilise the government’s commitment to equality. Such legislation will stop this burden falling on the leadership case by case.
LKY’s policies, though sometimes harsh, were rooted in practicality and long-term thinking. The Internal Security Act ensured peace and stability during critical years. Likewise, his investments in education and infrastructure established a foundation for sustained growth. His focus on political stability, a robust legal system, and zero tolerance for corruption inspired investor confidence. Singapore’s Corrupt Practices Investigation Bureau (CPIB) was empowered to tackle corruption at all levels. Sri Lanka must adopt a similar mindset to revitalise the Bribery and Corruption Commission, moving away from populism and short-term fixes in favour of strategic, future-oriented policies.
AKD’s primary election theme was anti-corruption, reflecting a key aspect of LKY’s leadership. His unwavering stance against corruption defined LKY’s pragmatic governance. He held public officials to the highest accountability standards, ensuring that anyone guilty of corruption faced severe consequences, including dismissal, public exposure, and prosecution. By rooting out corruption, Singapore built domestic credibility and attracted global investment. We in Sri Lanka need such legislation at the earliest opportunity to deal with various kinds of corruption that are appearing again and involving many public officials.
In Sri Lanka, corruption has long undermined public trust in institutions and stifled economic growth. With overwhelming public support, AKD is well-positioned to deliver on his promise to combat corruption. However, this needs to be done early before the government gets entangled with controversy over its own ‘tiered’ standards. Through comprehensive legislative measures, Sri Lanka can rebuild its institutions, restore public confidence, and chart a course toward sustainable development.
LKY was considered “cruel” by some because he treated all races equally without favouring any. AKD shares a similar stance. One of the hallmarks of LKY’s leadership was his unwavering commitment to meritocracy. This created a culture of excellence where the best and brightest minds were responsible for leading the country. In Singapore, recruitment and promotions across all sectors were strictly based on merit—capabilities, skill sets, and abilities—not on connections, nepotism, racial considerations, or personal favouritism. Although challenging to implement, meritocracy can be implemented with the open advertisement of qualifications needed, a transparent appointment process, strict job plans with annual reviews linked to customer feedback, and personal development strategies that are considered a necessity to continue. This approach will foster a culture of excellence and innovation, like Singapore, ensuring that the most capable individuals propel the country forward.
Sri Lanka must break free from the grip of favouritism and focus on nurturing talent through equal opportunities for all citizens, regardless of ethnicity or social background. Early signs of this approach are visible under AKD’s leadership. LKY understood that for a nation to progress, its institutions must be led by those who are truly capable, irrespective of their background. By adopting meritocracy, Sri Lanka could break the cycle of favouritism, nepotism, and ethnic division that has often hindered its development. Establishing a system where opportunities are based on ability and performance could unlock the full potential of Sri Lanka’s people, fostering a culture of innovation, growth, and national unity.
After gaining independence in 1965, during Singapore’s formative years, LKY focused on eliminating corruption, gang activities, and communist threats to create a peaceful and secure nation. The Internal Security Act (ISA) granted his administration discretionary powers to arrest and detain individuals without trial, when necessary, to prevent actions deemed harmful to Singapore’s security, public order, or essential services.
The ISA allowed preventive detention, suppression of subversion, and countering of organised violence against persons and property. Sri Lanka urgently needs a similar act to ensure that politicians and public officials comply with legally binding measures. With its Parliament still in its formative stages, we hope Sri Lanka will soon establish a comparable Internal Security Act. By eliminating corruption at all levels, as LKY did, Sri Lanka can inspire public trust and attract international investors who view stability and a corruption-free environment as prerequisites for investment. This approach could transform Sri Lanka into a manufacturing, business, and financial hub for the Indian Ocean region.
Under LKY’s leadership—often described as strict—Singapore transformed from a third-world nation into a first-world country. Sri Lanka has the potential to achieve even more, given its abundant natural resources, strategic location, and educated population that can be developed into a skilled workforce. With its prime position in the Indian Ocean, Sri Lanka could become a regional economic powerhouse—provided it fosters a stable and investor-friendly environment. Like Singapore, Sri Lanka should adhere to a non-aligned foreign policy to emerge as a crucial node in global trade and finance, maintaining friendly ties with Eastern, Western, and Asian powers while leveraging its strategic location.
While some label LKY’s methods as “cruel,” his leadership was not about oppression but discipline and fairness. Whether these policies were “cruel” or benevolent is debatable, but their results speak for themselves. He treated all races equally, fostering harmony in a diverse society by ensuring everyone felt they had a stake in Singapore’s future. Moreover, LKY’s economic policies were marked by simplicity and foresight. Low personal income taxes, the absence of capital gains and inheritance taxes, and a business-friendly environment encouraged reinvestment and entrepreneurship. By positioning Singapore as a global trade and financial hub, LKY ensured its economic resilience. Sri Lanka, too, must prioritise national unity. Divisive politics and ethnic biases must be curtailed to build a shared vision of prosperity and peace, as AKD is striving to do.
LKY’s leadership was built on three core tenets relevant to Sri Lanka today: meritocracy, integrity, and pragmatism. Encouragingly, AKD appears to be moving in a similar direction. One of LKY’s greatest strengths was his pragmatic, long-term approach to governance. He maintained tight control over domestic finances, preventing the internationalisation of the Singapore dollar and limiting the operations of foreign banks. This created an environment that attracted international firms eager to establish themselves in Singapore. Sound financial policies, a corruption-free environment, and a focus on technological advancement helped Singapore become a hub for multinational companies like General Electric. State-owned enterprises like Temasek Holdings and Singapore Airlines were run with business efficiency, often outperforming private sector competitors. Sri Lanka could adopt a similar model to enhance the performance of its state-owned enterprises and boost economic growth.
Singapore adopted a two-pronged financial strategy: becoming an international financial hub while ensuring its financial sector supported key domestic industries like manufacturing and shipping. Additionally, integrating foreign and local talent fuelled decades of sustained economic growth. LKY’s focus on economic development, making Singapore an attractive investment destination, and drawing world-class manpower offer valuable lessons for Sri Lanka.
To replicate such success, Sri Lanka must invest in state-of-the-art infrastructure, establish excellent air and sea linkages, and maintain a low and transparent tax regime.
Clean and efficient bureaucracy, a strong regulatory and legal framework, and a neutral diplomatic policy—balancing relations with global powers like the US and China—are critical. Developing clean, green cities powered by sustainable energy will also be key to achieving remarkable economic success akin to Singapore’s.
Opinion
‘A degree is not a title’ – a response
Reference the above-captioned letter in The Island of 16 Decembe, its writer, Philosophiae Doctor (PD), he is incorrect in his analysis of a Ph. D degree as a title. As Dr. Upul Wijewardena has said, only a Ph. D holder who can use the title ‘Dr’. However, the tradition is for those who have a medical degree to be called Dr. PD has written about the history of universities and quoted chapter and verse about the origin of degrees. We are now in the twenty first century and most universities have their own system of awarding Ph. Ds. For instance, British universities award Ph. Ds based on 100 per cent research whereas in American universities Ph. D degrees are awarded on the basis of 50 per cent research and 50 per cent course work. The research degree is given more weight at interviews.
PD has also said that a Masters’ Degree (MA) is essential to teach in a university. Many universities including universities in Sri Lanka offer Assistant Lecturer positions to those who have first degrees with classes. Some time ago, the Dean of the faculty of Arts at Otago university, New Zealand had only a B.A. He was appointed Professor because of his publications. In American universities lecturers with a Ph. D are addressed as Assistant Professor. Then a Professor after retirement has to get permission from his university to use the title as Professor (Emeritus). There is no such requirement for a person with a Ph. D to use the title Dr. Modern universities do not follow procedures that were adopted in old Europe mentioned by PD.
Dr. P. A. Samaraweera
Opinion
Electricity tariffs cannot be reduced due to CEB Mafia
Ceylon Electricity Board (CEB) has apparently become a law unto itself; it is increasing the salaries and other perks for senior staff at their will. There are 26,131 employees of CEB and its monthly salary bill is around Rs. 3,000 million, out of which 600 million goes for the salaries of engineers. A special grade engineer’s monthly take-home salary is reportedly about Rs. 919, 432 while an E1 grade engineer draws around Rs. 694,240 a month. These include a vehicle allowance of Rs. 250,000 and other benefits. The CEB has thought it is fit to regularly increase the salaries at the insistence of the powerful engineers’ union every three years without getting the approval of the cabinet or the public accounts committee of the finance ministry.
Out of the total number of employees at least 50% are political appointees recrutied by successive ministers of the power and energy ministry. Even the salary of a meter reader is Rs. 54,420 and it comes to around Rs. 125,000 a month. This is far higher and about 100% more than a graduate teacher. With such an excessive workforce earning exorbitant salaries no wonder that the CEB cannot reduce the electricity bills of consumers. There are 6.29 employees for every megawatt (MW) of power generated by CEB while the Malaysian Electricity Board generates six times more power and has only 1.15 employees for one MW of power generated!
PAYE tax should be borne by the employee and it is against the Inland Revenue Act for an institution to pay the PAYE tax due from its employees. It has been revealed before the COPE (the Committee on Public Enterprises) that Rs. 5 billion has been paid by the CEB as PAYE tax to its employees during the period 2010-2019 in contravention of a Cabinet decision on 13 December 2007. This, the CEB has been doing at the expense of consumers, who have to pay higher tariffs.
Verite Research has revealed that Sri Lankan households pay 2.5 to 3 times more for electricity than the average cost to their counterparts in South Asian countries. Our rates are much higher than in Bangladesh and Afghanistan. For instance, a consumer using 300 units of electricity has to pay an electricity bill of Rs. 21,860 while the average equivalent rate in South Asia is only Rs. 7,340. This shows how our professional engineers have managed the CEB power generation so inefficiently over the years.
The reason for this inefficiency is due to the neglect of renewable energies in Sri Lanka. The CEB engineers have always advocated for more and more coal-powered plants. They have deliberately blocked renewable energy projects for obvious reasons. The Supreme Court has found the CEB guilty of blocking a proposal by Vavuniya Solar Power Private limited for a solar energy plant and ordered it to pay Rs 01 million rupees as damages. This, too, would have been paid from CEB funds and those who took such corrupt decisions have got off scot-free. The technical officers of CEB allege that CEB management has purchased power from private power plants despite an increase in hydro power generation. In case hydropower is insufficient to meet the demand another idling turbine at Norochcholai could have been put into operation. There are serious allegations that CEB engineers are intimately connected to such private power plants and even own all or part of them. The new government should appoint an independent commission to investigate allegations against the CEB.
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