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Editorial

Booze, hooch and taxes

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Writing his chairman’s review in the latest annual report of the Distilleries Company of Sri Lanka PLC (DCSL), the country’s biggest liquor manufacturer, Mr. Harry Jayawardena warned that pure coconut arrack may soon be history. This prediction was based on the price of this super-taxed product, which has made it totally unaffordable to the consumer. Obviously Jayawardena is talking from the perspective of the manufacturer, but nobody would or could dispute his logic. People don’t drink kasippu out of choice. The price stick, freely used by all governments, has driven imbibers into the arms of the illicit hooch mudalalis. Gone are the days when ‘Pol’ and ‘Gal’ arrack was priced at ten and eight rupees a bottle respectively. Today a bottle of ‘Gal’ costs Rs. 1,600, ‘Pol’ Rs. 1,750 and if you want it double distilled, a bottle would set you back a cool 2,000 bucks.

‘Pol’ of course refers to coconut arrack while ‘Gal’ stood for what was produced out of potable alcohol obtained as a byproduct of the Gal Oya sugar industry. The word “byproduct” was a clear misnomer; the sugar industry, whether at Gal Oya, Pelwatte or wherever, has long been making more money out of the alcohol distilled from the sugar cane molasses than from the sugar itself. This was probably why a previous government took over the listed Pelwatte Sugar Manufacturing Company established to help the country to be self-sufficient in sugar. While a private sector chairman of Pelwatte pre-takeover freely admitted that the company made more money from its alcohol byproduct that from its sugar, where the alcohol Pelwatte produces goes now is anybody’s guess. The budget debate would have been an opportunity to ask that question and get a very useful answer; but that did not happen.

We are writing this in the context of what emerged during the budget debate which ended on Thursday after 20 days of sound and fury with the predictably comfortable passage of Budget 2021. There was a lot discussion there about “artificial toddy,” something that Harry Jayawardena too has been talking about for many years. Matara District MP Buddhika Pathirana (SJB) estimated state coffers were being robbed of as much as Rs. 80 billion in excise revenue by artificial toddy manufacturers exploiting loopholes in the law. Pathirana says that the artificial toddy industry is rooted in the southern coastal area where a cocktail of urea, ammonia, nickel-cadmium from old cell phone batteries and sugar is used in a lethal brew.

He explained that the extent of the problem can be gauged with some simple arithmetic. Apparently only about one and a half liters or toddy can be had from a single coconut palm. Adding up the number of trees tapped and the volumes offered to distilleries, Pathirana estimates a discrepancy of 60-70,000 liters. Dangerously, it’s not only imbibers choosing to down rotgut with the attendant health implications, but also ordinary householders buying what they think is coconut vinegar who are at risk, he has pointed out. The Excise Department is well aware of the existence of this artificial toddy racket, which is a continuing one, although it does not agree that the Rs. 80 billion revenue loss that is alleged is accurate.

DCSL which took over the assets of its state-owned predecessor, the Distilleries Corporation during the Premadasa administration, when the government arrack monopoly (or near monopoly) was ended has long been conscious of the fact that it is a player in a so-called ‘sin industry.’ It has from the time of its first chairman, former Civil Servant V.P. (Totsy) Vittachi, been diversifying into various other businesses. Given that over 90% of what you pay for a bottle of arrack (or a single cigarette for that matter) are taxes the manufacturers are collecting for the government, and the payments to the state are not instantly made, a massive cash tranche is available to them to make other investments. This DCSL has cleverly done over the years, and its holding company, Melstar, is a highly diversified conglomerate into a variety of businesses. Ceylon Tobacco Company (CTC) has not done likewise to the extent of DCSL although it once diversified into insurance like its parent, British American Tobacco. However CTC pays its tax collection to the Treasury on a weekly basis. We do not know how it works where DCSL is concerned.

State Minister Nivard Cabraal who is the virtual Deputy Minister if Finance (the Prime Minister holds the finance portfolio) has called for a report from the Excise Department and the Secretary to the Treasury on matters that emerged in Parliament during the discussion. He acknowledged Pathirana’s useful contribution to the debate and assured follow-up on matters raised. The hard liquor industry has not only been a substantial source of government revenue, but had also produced many millionaires in this country. Arrack has made fortunes for different entrepreneurs from the Dutch and British colonial era when so-called arrack renting was a lucrative business. There has been generous philanthropy arising from such fortunes with, for example, the founding of Visakha Vidyalaya by Mrs. Jeramias Dias (Selestina Rodrigo) of Panadura. Ironically, Arthur V. Dias (popularly known as Kos Mama because of his campaign to plant jak trees), the son of Jeramias Dias, became a leader of the temperance movement at a later time.

It is common knowledge that the illicit liquor industry rampant in the country not only costs the government desperately needed revenue but also is at the root of corruption in the various enforcement agencies. Political patronage to this menace has been freely alleged over the years as have similar allegations with regard to narcotics. Prohibition has not proved a success wherever it was attempted. Government must necessarily balance competing interests including revenue, the cost of alcohol related disease to the healthcare system, the damage drunkenness causes innumerable families and many more in designing its alcohol policies. There’s a lot wrong with what prevails – artificial toddy is just one aspect.



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Editorial

Dalada Vandana

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Friday 25th April, 2025

Hundreds of thousands of Buddhist devotees have realised their dream of viewing the sacred tooth relic up close and paying homage to it during the past several days at the ongoing Dalada Vandana exhibition in Kandy. They have expressed their gratitude to the organisers of the holy event––and rightly so.

Government propagandists have sought to help the ruling NPP coalition gain political mileage from the relic exposition in the run-up to the local government elections. President Anura Kumara Dissanayake, who, during his Opposition days, used to condemn political leaders for visiting holy shrines, such as the Dalada Maligawa, with television crews in tow, opened Dalada Vandana, and received much publicity.

The government categorically stated that there would be no VIP queues for Dalada Vandana, and no devotee would be given preferential treatment, unlike in the past. But complaints abound that many influential people were granted privileged access to the Dalada Maligawa, while ordinary devotees were languishing in long queues for days.

The situation in Kandy has taken a turn that the government, municipal officials, health authorities and the police apparently did not bargain for. The Hill Capital is groaning, overwhelmed by the sheer number of visitors flocking there. Devotees are complaining of the lack of food, water and sanitary facilities in Kandy, which, according to media reports, is strewn with garbage, and has toilets overflowing in some areas. The government and Kandy municipal officials should have had plans ready to face such an eventuality. It is hoped that public health officials will go all out to prevent disease outbreaks.

The availability of free food and sanitary facilities, temporarily sheltered walkways, etc., for pilgrims in Kandy received wide publicity on the first day of Dalada Vandana, and it is only natural that so many people converged to the sacred city, expecting a comfortable stay there. Yesterday, the police and state officials had to urge devotees to stop travelling to Kandy, which is heavily congested and cannot take any more visitors, and those who are already there will have to spend about two days to enter the Dalada Maligawa.

The police have taken action to prevent buses, etc., carrying devotees from entering the Kandy city, we are told. That is the only way they can prevent the city from becoming even more congested and chaotic. But it has not been possible to stop people from reaching the city, and one can only hope that the police and the armed forces will succeed in carrying out crowd control effectively, and there will be no stampede in the city.

Hundreds of thousands of people have been waiting in several queues stretching for about 10 km each for the past three days or so to get a close glimpse of the sacred tooth relic and pay homage to it. Chances are that not all of them will be lucky enough to do so, and how people will react in the case of being turned away remains to be seen. Sri Lankans tend to turn aggressive at the drop of a hat, and this is something the police and the security forces will have to take cognisance of.

A mega event like a relic exposition that attracts huge crowds requires several months of planning. But the government wanted Dalada Vandana held fast for obvious reasons, and the Kandy has been plunged into chaos.

Meanwhile, there has been a proposal to hold Dalada Vandana annually. While this idea may resonate deeply with Buddhist devotees, the question remains whether the government, the custodians of the Sri Dalada Maligawa, the Kandy municipal authorities and the police are up to the gargantuan task—especially given their responsibility for organising the annual Dalada Perahera. Crucial factors such as costs and the need for extraordinary security arrangements must also be taken into consideration.

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Editorial

Good governance: Pie in the sky?

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Thursday 24th April, 2025

The NPP government is coming under increasing pressure to disclose the contents of the MoUs it signed with India during Indian Prime Minister Narendra Modi’s recent Sri Lanka visit. But it keeps them under wraps, trotting out various excuses and exuding hubris. Minister of Foreign Affairs Vijitha Herath as well as Cabinet Spokesman and Minister Dr. Nalinda Jayatissa has said anyone can invoke the Right to Information (RTI) laws and obtain information about the MoUs in question. Curiously, Dr. Jayatissa has reportedly said that some information about the MoUs cannot be revealed to the public without India’s consent! So, the question is whether he and Herath think Sri Lanka’s RTI Act will compel India to consent to reveal the contents of the controversial MoUs to the Sri Lankan public.

The NPP government never misses an opportunity to flaunt its popular mandate and brag that it has been elected by as many as 6.8 million people. But it does not respect their right to know the contents of the agreements/MoUs it has entered into with another country. Those people voted for the NPP in the hope that it would fulfil its pledge to usher in good governance.

Claiming that all its predecessors had only paid lip service to good governance, the NPP sought a mandate to make a difference. But there has been no radical break with the past under the current dispensation, as evident from the manner in which the NPP is conducting its first election campaign after being ensconced in power. It has adopted the same modus operandi as its predecessors in a bid to win the upcoming Local Government (LG) polls. State workers have been given pay hikes; government politicians are issuing threats to impose fund restrictions on the local councils to be won by parties other than the NPP; President Anura Kumara Dissanayake, who is also the leader of the JVP and the NPP, has promised to expand the Aswesuma social welfare scheme to include 400,000 more families; the government tried to distribute dry rations about two weeks ago to muster favour with the public, and it has pledged to recruit 35,000 more individuals into the state service, which is already bursting at the seams.

The JVP/NPP has made a mockery of its much-advertised commitment to good governance by refusing to ensure transparency regarding the aforementioned MoUs with India, especially the one on defence cooperation. The UN has defined good governance as the transparent, accountable, inclusive, and efficient management of public affairs and resources. Good governance cannot exist in a political environment devoid of transparency and accountability.

The JVP/NPP leaders vehemently protested when the previous government dragged its feet on presenting its agreement with the IMF to Parliament. Today, they are practising exactly the opposite of what it asked its predecessors to do. They insist that their MoUs with India do not contain anything detrimental to Sri Lanka’s interests. If so, they should have made the contents thereof readily accessible to the public of its own volition.

The JVP-led government has rightly undertaken to ensure that justice will be served to the victims of the Easter Sunday terror attacks expeditiously. It must go all out to fulfil that pledge. However, first of all, it ought to tender an unqualified apology to the public for its reign of terror, which destroyed thousands of lives and state assets worth billions of rupees in the late 1980s, when it campaigned against the Indo-Lanka Accord, claiming that it had been thrust on Sri Lanka. It sought to justify its mindless terror by claiming that violence was the only means it was left with in its efforts to defeat what it described as Indian expansionism, but today it has no qualms about signing MoUs/agreements with India on the sly. It is only fuelling speculation that it is doing its damnedest to prevent the ill-effects of its deals with India from becoming public in the run-up to the upcoming LG polls.

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Editorial

Waiting for Godot?

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Wednesday 23rd April, 2025

A four-member committee has been appointed to study the report of the Presidential Commission of Inquiry (PCoI) that probed the Easter Sunday terrorist bombings (2019). It comprises a Senior Deputy Inspector General (Chairman), the DIG of the CID, Director of the CID and the Director of the Terrorism Investigation Division. It is reported to have set up several subcommittees. Based on new evidence that may emerge, fresh investigations will be launched, the Police Media Spokesman has said.

Thus, the NPP government, too, has chosen to kick the can down the road, so to speak. All signs are that the committee and its subcommittees will take a month of Sundays to study the PCoI report, and fresh investigations to get underway on the basis of their findings and observations could go on until the cows come home.

What impact will the PCoI report have on the police investigations that have been going on into the Easter Sunday carnage for years? If the police have not already drawn on the PCoI findings and observations in probing the terror attacks, their investigations are likely to be delayed further until the conclusion of the perusal of the document.

One may recall that in August 2021, the Catholic Church demanded credible answers, within one month, to questions regarding the Easter Sunday tragedy. Its ultimatum, given in a 20-page letter, prompted the Gotabaya Rajapaksa government to have the then IGP C. D. Wickramaratne issue a special statement explaining why the probe into the Easter Sunday terror attacks had been delayed. He found fault with those who had handled the police investigations previously.

Wickramaratne’s statement, which shed light on the sorry state of affairs in the CID and other investigative branches of the police, warrants the attention of those who seek justice for the Easter Sunday carnage victims expeditiously. Wickramaratne said the police probes into the terror attacks had been riddled with flaws. Investigators had been in an inordinate hurry to make the bombings out to be the work of a handful of extremists with links to ISIS, and no serious attempt had been made to get to the bottom of the carnage, he said, claiming that they had also taken great pains to prove that all those involved in the terror attacks had been either killed or arrested. Some police officers handling investigations had acted irresponsibly, said Wickramaratne, noting that certain ego-driven investigators had tried to conclude the probes fast, and claim the credit for that; their approach had adversely impacted the criminal investigations.

The PCoI report had been referred to the Attorney General for necessary action, Wickramaratne noted, claiming that the previous investigations had been characterised by a total lack of coordination among the investigation teams, who worked in water-tight compartments. That fact had become evident from the way some incidents had been probed before the Easter Sunday bombings, IGP Wickramaratne said, pointing out that their interconnectedness had gone unnoticed.

Some other factors IGP Wickramaratne adduced to explain the delays in the police investigations in question were the process of ascertaining information from the countries where some suspects were living, and the gathering of evidence pertaining to telephone conversations from 24 June 2014 and analysing them to determine when the dissemination of extremist ideas began in this country and how extremism developed. Among those who aided and abetted the perpetrators of the Easter Sunday attacks were some educated persons and professionals, and given their calibre and social standing, investigations had to be carried out thoroughly if they were to be successfully prosecuted, Wickramaratne said, claiming that it had taken four years to bring those responsible for the bomb attack on the Dalada Maligawa in 1998 to justice, and investigations into the suicide bomb attacks on a religious ceremony held by a mosque at Akuressa in 2009 had taken seven years. The police had been able to carry out those investigations free from pressure, he said.

Cabinet Spokesman Dr. Nalinda Jayatissa has gone on record as saying that the task of disclosing the masterminds behind the Easter Sunday terror attacks should be left to the CID and the judiciary. The government, which promised to name the terror masterminds itself, has made another about-turn! With the investigative process marked by delaying tactics, inaction and deflection, it may not be unreasonable to say that at this rate, justice for the victims of Easter Sunday carnage may be galactic years away.

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