Features

Confronting capitalism – market oriented economy with state guidance

Published

6 years ago

2021/02/18

By Jayampathy Molligoda

Recently the Governor, Central Bank, Professor WD Lakshman, at a media briefing stated that Sri Lanka was following a market- oriented economy with state guidance, involving some controls and restrictions. He was quoted as saying that such a framework would not be successful under an IMF program. This, in my view needs further elaboration. As we understood, IMF programme will essentially impose some conditions such as; maintaining fiscal discipline- not to exceed the government budget deficit beyond say 8-9 % of GDP, not to defend external value of the rupee, meaning not allowing the rupee to depreciate by pumping dollars from the official reserves of the Central Bank, not to go for unnecessary commercial foreign borrowings etc.

Managing in turbulent times:

According to IMF global economic outlook based on October 2020 report, most countries imposed stringent lockdown measures and as a result, the economic activities contracted dramatically on a global scale. The report says that although easing lockdowns can lead to a partial recovery, economic activity is likely to remain subdued until health risks abate.

The positive feature of working with IMF is that our credit rating could be improved and our Banks and other financial institutions may be able to transact with foreign financial institutions efficiently and arrange trade finance facilities and commercial borrowings at competitive rates. Also, the Sri Lankan exporters may be able to receive foreign remittances without unnecessary delays and restrictions imposed by foreign correspondence banks. As for credit rating position, Sri Lanka was downgraded four months back and at present, Sri Lanka is ranked C grade. When a country is under an IMF standby facility, there is a greater possibility of the ratings getting improved, thus building confidence among the business partners and foreign multilateral financial institutions like World Bank, ADB, JBIC etc.

As articulated by the Central Bank Governor, the government has been able to contain the trade deficit through stringent import control measures in order to save much needed foreign exchange, as the tourism & travel and some exports such as textile and garment sectors have been badly affected during the year under review. This is in the backdrop of some export targets where the government policy makers were expecting 4-5 billion US $ per annum in terms of tourism proceeds before COVID-19 pandemic hit. In fact, Sri Lankan economy could realise only 0.9 billion US $ from tourism in 2020.

Nevertheless, the Central bank has been able to provide guidance, support and advice to the government to manage the macro- economic fundamentals quite efficiently during these turbulent times, which is commendable. The following table shows the summary of the vital statistics of Sri Lanka’s macro- economic transactions with the rest of the world. An attempt has been made by the writer to make some provisional figures and estimates to ascertain whether Sri Lankan economy could withstand the pressure from this global economic downturn. Also, it is important to critically review the efficacy and effectiveness of the economic policy changes contemplated by the present government policy makers and to what extent they succeed in confronting capitalist economic system in todays’ context.

= Author’s estimates

As can be seen, the biggest challenge is in the management of the debt repayment capacity, especially in view of the fact that a total sum of US $ Billion 7 is due during the current year, which is the highest ever debt service figure that the country has to service in order to avoid sovereign default. In addition to above, domestic forex debt repayments such as FCBU and SLDB amounting to 1.5 billion US$ will also become due, however the government may be able to successfully arrange foreign SWAPs from friendly countries’ multilateral financial institutions and Central banks to meet any contingencies. It should be mentioned that the Central Bank of Sri Lanka is vested with the responsibility of the management of the public debt, in terms of Section 113 of the Monetary Law Act.

Confronting capitalism:

Throughout the world, economic growth has drastically slowed. Natural resources are exploited for short-term profits. Wealth is concentrated in the hands of a few. When a large number of children living in poverty, multinational ultra- rich elites tuck their money into tax heavens. As we all know, lockdown impacted peoples’ ability to move across borders, but it doesn’t stop money flowing into tax havens around the world, as claimed by Forbes magazine.

Anna Zakrzewski, who leads Boston Consulting Group’s Global Wealth Management division did a detailed study and the economic shocks of coronavirus have meant that offshore financial centres such as Switzerland are back to their old tricks: Banking peoples’ money away from their more- risky homelands.

‘Confronting capitalism’ by Philip Kotler published by American management association explains 14 major problems undermining capitalism and offers real solutions for a troubled economic system. Although best known as a marketing guru, Kotler trained as an economist under three Nobel price- winning economists, namely Prof. Milton Friedman who represented free market economic thinking and two other professors, Paul Samuelson and Robert Solow of MIT. Some of the serious shortcomings of capitalism as articulated by Kotler include: tends to focus narrowly on GDP growth, generates income & wealth inequality, proposes no solution to persisting poverty, exploits natural resources and environment in the absence of regulations, favours short term profits over long run investment planning, fails to pay a living wage and others.

New economic and business model for tea plantations:

This reminds me the Sri Lankan tea plantation -RPC model introduced in 1995, where some 88,000 hectares of cultivated tea estates have been transferred to 20 RPCs under 53 year lease period with only one golden share retained by the government, expecting the companies to put in much needed investments in Re/new planting, infilling of tea, optimum utilisation of arable agricultural land and other resources including factory modernisation, tea marketing efforts and other viable diversification options , and improve labour management relations through collective bargaining process etc. As per latest statistics at Tea Board, the total tea production at RPC level has come down to 70.6 million own crop and bought leaf of 24.2 million kilos totalling only 94.8 million kilos in 2020 (total national production in 2020 was 278 million kilos- 34% RPC share) from the 135. 3 million kilos in 1995 where the total national production was as 246 million kilos- 55% RPC share.

in January 2019, the daily wage was revised to Rs 750/ per day under the main collective agreement entered into between the RPCs and worker trade unions in 2003. Unfortunately, the daily attendance allowance and the productivity linked wage rates hitherto enjoyed by the workers have been taken out jointly by the parties to the collective agreement, which the undersigned, as a non- executive director attached to one of the RPCs had made written representations in January ’19 itself to the EFC and the negotiation committee, thus expressing serious concerns. Thereafter, the demand for wage increase came even before the presidential election held in November 2019 from worker trade unions under the collective agreement generally to be negotiated once in two years only. The RPCs have called for a new hybrid wage structure focusing on a revenue share model based on ‘three day’ productivity-focused rates and three daily wage rates -a total package for the entire week for the estate workers. But this was not acceptable to the worker unions quoting ‘six day work rule’ and practical issues. An option favoured by the trade unions is to increase the basic wage which attracts not only EPF/ETF, even the other terminal benefits such as gratuity holiday pay etc. An ‘out-grower model’ where the workers are allocated small plots of land to grow their own tea to sell to the factories was also suggested without much deliberations to study far reaching implications.

In view of the deadlock, the cabinet has decided to refer the demand of Rs 1,000/ daily wage to the tea & rubber industry wage board for a decision and they have incorporated a sum of Rs 900/ together with a budgetary allowance of Rs 100/ to make Rs. 1000 as minimum daily wage payable to the workers under wages board ordinance. The writer has been a proponent of the collective bargaining process under the main collective agreement entered in to 2003. My own view is, once the wage anomaly is sorted out, it is expedient that the parties to get back to the CA and honour the conditions in the said agreement in the best interest of the tea industry, thus maintaining good labour: management relations at estate level

Export earnings are getting trickled -down to farmers:

With an annual export earning of LKR 230 billion, at the Colombo tea auction level, the tea prices have increased from Rs 545/= per kilo of made tea in 2019 to Rs 628/= per kilo for the full year 2020. Despite production decreases, which is the main concern today, the foreign exchange earnings have reached this level thanks to the fob price of tea improving from Rs. 822/ per kilo to Rs. 867/ in 2020, due to efforts by our tea exporters- supported by improved quality of the final product by growers and manufacturers and ‘Ceylon Tea’ promotional campaign. Consequently, the export earnings are getting tricked down to tea small holders and in fact, the farmers are receiving Rs 90 per kilo of their green leaf as against Rs 79/= per kilo in 2019 on an average basis. The main thrust would be integrated quality and productivity. Contrary to media reports recently, the majority of RPCs have also been making profits during the year 2020 as per Colombo stock exchange filing. Tea. Credit goes to all the stakeholders of the global tea value chain from our tea grower to Sri Lankan tea marketing companies.

Sri Lankan tea industry is not just a business, it is a way of life for over 2.5 million people and we need to protect and nurture nearly 500,000 small holders and 700 tea factories and 140,000 estate workers by encouraging tea exporters to really focus on promoting and marketing Ceylon Tea B 2 C, in addition to B2 B tea exports. Discerning tea consumers world over are paying premium prices for Ceylon tea, due to promotional campaigns focused on authenticity of the product based on sustainability credentials and wellness factor of Ceylon It is in that context only the recent wage increases should be viewed.

Conclusion:

From the above it can be seen that the main stakeholders, namely the RPCs, the worker trade unions and the government have failed in working together to attain the mission set out at the time of privatisation of tea plantations in 1992. After 29 years of the first privatisation, it has now become necessary to migrate in to a new economic and business model for RPCs, thus promoting high quality plantations, and need to focus more on sustainable agricultural and manufacturing practices through infusion of increased investments and management inputs. Nevertheless, the success depends on our ability to market and promote ‘Ceylon Tea’ in global target markets as a premium quality beverage under the ‘sustainable food’ category. As Mahatma Gandhi said, the difference between what we are doing and what we are capable of doing would solve most of the world’s problems.

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Features

Coercive laws recipe for future misrule

Published

19 hours ago

2026/10/13

Sahan Weerasooriya

by Jehan Perera

The NPP government is going after powerful figures from the past and present who have engaged in corruption, fraud and criminal activity in a way that no previous government in Sri Lanka has done. Former ministers, politicians and senior state officials are among those facing investigations and legal proceedings. The government has placed before Parliament a document listing 50 cases involving corruption, fraud and other crimes. These include not only financial offences but also cases relating to the Easter Sunday attacks, the killings of Lasantha Wickrematunge and Wasim Thajudeen, the disappearance of Prageeth Ekneligoda and attacks on journalists Keith Noyahr and Upali Tennakoon.

The significance of this effort is that it can demonstrate that nobody is above the law, regardless of political connections or social standing, which will help restore public confidence in institutions that have long been distrusted. It could also recover public resources, improve the investment climate and strengthen the foundations for a more prosperous and just Sri Lanka. When criticised for focusing on the past and not the present, the government position is that these investigations were initiated under earlier governments, particularly between 2015 and 2019, and that it is now allowing investigators to proceed to deal with the backlog without political interference.

But there is an aspect of the government’s approach that is less justifiable. While pursuing past wrongdoing by powerful individuals, it is also advancing a triumvirate of draft laws that could give the state sweeping powers over citizens, organisations and dissent in the present and future. The draft Prevention of Terrorism legislation, the Prevention of Organised Crimes Bill and the NGO Registration and Supervision Bill raise serious questions about the over-centralisation of power. Each of these laws strengthens the powers of the state while weakening the rights and safeguards that protect people from their misuse and thus questions the basic rights of people in democracy where ‘the power of the people is vested in the government’. This is a recipe for future misrule rather than the rule of law. As the well-known saying goes, power corrupts and absolute power corrupts absolutely.

Proposed Laws

The real test of system change, for which the government obtained an overwhelming mandate, requires not only a government willing to hold others accountable, but one prepared to subject itself to the same principles of legality, transparency and restraint. The three proposed laws that are particularly important in this regard are the Protection of the State from Terrorism Bill, the Prevention of Organised Crimes Bill and the NGO Registration and Supervision Bill. Each of these draft laws has been presented as serving a legitimate purpose. Preventing terrorism, combating organised crime and ensuring that NGOs do not facilitate money laundering or terrorist financing are proper responsibilities of the state. Sri Lanka has international obligations in these areas, and no responsible government can disregard them. However, the existence of a legitimate objective does not justify every means adopted to achieve it.

The proposed Protection of the State from Terrorism Bill illustrates the problem. Although its definition of terrorism draws on a model developed by a former United Nations Special Rapporteur, the Human Rights Commission of Sri Lanka has warned that the definition of terrorism extends beyond the model and could bring legitimate political protest, trade union action and civil disobedience within the scope of counter-terrorism legislation. Its concerns also include prolonged detention, inadequate judicial oversight and restrictions on access to legal counsel. These are objections that go to the heart of the relationship between the citizen and the state. The government cannot credibly promise to protect democratic freedoms while creating powers that could be used to restrict them. It is necessary for the government to reassess the draft through transparent consultation and revise provisions that could criminalise legitimate dissent.

The Prevention of Organised Crimes Bill raises similar concerns. It is presented as giving effect to the United Nations Convention against Transnational Organised Crime, which Sri Lanka ratified in 2006. The Centre for Policy Alternatives (CPA) has argued that the convention does not require many of the bill’s provisions. The proposed law extends to a broad range of offences, permits detention orders lasting up to a year, makes confessions to police admissible for purposes of legal evidence, and introduces extensive surveillance powers. A law intended to dismantle criminal networks should not create a parallel system of exceptional powers that could be applied far beyond organised crime. Nor should safeguards developed through years of experience with abuses under the Prevention of Terrorism Act be weakened through legislation bearing a different name. The government should review whether or not existing laws could be used effectively to control these crimes or whether each exceptional power is necessary.

Civil Society

The proposed NGO Registration and Supervision Bill presents another test of the government’s intentions. The government may reasonably seek transparency in the finances of organisations receiving public or foreign funds, including measures to prevent money laundering and terrorist financing. It seeks to justify its overreach on the grounds of meeting the internationally mandated requirements of the Financial Action Task Force (FATF) for the Asia-Pacific region. But these objectives do not justify placing civil society and NGOs under excessive administrative control when even the FATF ranks them as low to medium risks. The draft bill would require registration and renewal, impose extensive obligations on organisations and empower authorities to suspend or deregister them on broadly framed grounds. It is important to redraft provisions that confer excessive discretion over registration, renewal, suspension and deregistration of NGOs.

Among the concerns raised by United Nations human rights special rapporteurs with regard to the draft NGO law are provisions requiring organisations to align with government policies and restrictions that could affect advocacy, dissent and freedom of association. The implications extend well beyond organisations that engage directly with the government. Community groups, human rights organisations, independent researchers and organisations working on reconciliation or accountability could find their activities constrained by uncertainty over how these provisions might be interpreted. Organisations that criticise government policies are not thereby working against the country. Their freedom to do so is part of what distinguishes a democracy from a system in which the government determines which opinions and activities are acceptable.

The government has generated considerable public goodwill through its pursuit of corruption and criminality. It should not assume that this goodwill gives it an unlimited mandate to strengthen the coercive powers of the state. The NPP knows from its own history that governments can treat dissent as a threat and use the machinery of the state against their opponents. There is still time to correct the drafts through transparent public consultation, narrow definitions of offences, meaningful judicial control over detention and surveillance, and effective remedies against arbitrary decisions. A government that pursues corruption while weakening safeguards against state abuse risks undermining its own achievements. Besides bringing to light the abuse of power by previous governments, the NPP government needs to build a system in which no future government can abuse power in the belief they can get away with it.

Features

Quality assurance without quality enhancement: The irony of university QA

Published

19 hours ago

2026/10/13

Sahan Weerasooriya

By Ramya Kumar

According to the Quality Assurance Council (QAC) of the University Grants Commission (UGC), quality assurance (QA) refers to “the means (i.e. the policies, attitudes, actions, procedures, etc.), by which an institution can guarantee with confidence and certainty, that the standards and quality of its educational provision are being maintained and enhanced”.

An expansive structure has been in place since 2005 to govern and implement QA processes within the state university system. The QAC is the focal point at the UGC that implements external reviews of state universities and institutes. Each university has its own Centre for Quality Assurance (CQA) tasked with performing QA in line with QAC directives. Faculties, in turn, have Internal Quality Assurance Cells (IQAC) performing their own QA; they are answerable to the CQA.

The big question is whether this all-encompassing top-down QA system, that in many ways undermines the internal dynamics of university governance, actually supports universities to enhance the quality of education. This article highlights some concerns.

Top-down check-box activities

The QAC conducts external reviews of universities and degree programmes. A review team appointed by the UGC (who may or may not have experience in the institution/programme in question) examines the self-evaluation report submitted by the said institution/programme. The team then conducts a site visit to verify the claims made in the university’s self-evaluation report, clarify issues identified during the desk review, and examine how QA procedures operate in practice. The team holds meetings with the university administration, members of the Council and Senate, Deans, Heads of Departments, academic and non-academic staff, students, and others. Following the visit, a draft report is submitted to the relevant institution/programme for comment before final publication. The reviewed institution/programme then prepares and publishes an action plan addressing the recommendations, with subsequent monitoring of progress.

There are some worthy QA initiatives under implementation, such as improving facilities for students with disabilities and strengthening mechanisms to address sexual- and gender-based violence. However, for the most part, QA activities have little to do with improving the quality of education. They are mostly preoccupied with monitoring faculty and department websites, digital transformation, student feedback, subject evaluation, course evaluation, peer evaluation, and, more recently, staff appraisal. These activities, which consume an inordinate amount of time—so precious at understaffed universities—have become check-box activities completed to generate evidence for the next review. Below is an excerpt of a conversation between two academics (1 and 2) that conveys how QA plays out at universities (reproduced with permission).

1: … .it’s like social media you know, like posting things on Facebook or twitter or Instagram. When people do a lot of social media, everything they do, they do thinking, “okay I’m going to post it in this way… this I have to put on my Instagram.” QA is a little like that… everything is considered in light of, “ah we can use this for the review, as evidence… for example very recently we were encouraged to have all the things that we do in our department in the faculty newsletter so then they can put in the review. Every little thing has to be noted down….

2: And with pictures and all…

1: At the very least it has to be written so that you have written evidence .. you can’t be doing something for the sake of doing something or because it is good for the department … and sometimes people tell me “oh yea that’s a good idea we can fit that under this x, y section of the review..”

2: Yea, and nobody really thinks about the actual outcome… whether it’s actually helping anyone..

1: I also find that a lot of the words that we used in different ways have now been co-opted to the QA discourse ..including quality.. I can’t actually say what I want as an “outcome”, for example, that the outcome of this workshop is that my students “think about” … then I am told “ah but no that’s not one of the Bloom’s taxonomy words, “think about”.…

2: And the worst part is these medical and agriculture people, these types of people go around spreading it like some kind of gospel!

1: Yea, this cookie cutter way of doing things, they think is the height of innovativeness or creativity, when actually it is so mundane … for me the most awful thing about it is like some fungus of mundanity has taken over through QA reviews.

2: yea, when you say QA, my mind closes off immediately and I stop listening…

Auditing everything but power

QA leaves out crucial aspects of university governance. For instance, there is no review or assessment of the “quality” of university administrations under Criterion 1 or the integrity of procedures governing the promotion of academic staff under Criterion 6 of the institutional reviews.

The majority in the Council—the university’s executive and governing body, which is responsible for selecting the Vice-Chancellor (VC)—are appointed in ad hoc fashion. Apart from the Ex-Officio members in the Council (VC, Deans, etc.), and the two members elected by the Senate, the remainder are appointed by the UGC with no formal consultation or vetting procedure. The VC appointment process described in UGC Circular No. 03/2023 exemplifies how an ostensibly technical process can become entangled in political sycophancy. The Registrar invites applications for the position of VC through advertisement. Applicants must submit a curriculum vitae, a statement of vision for the university and supporting documents. The University Council appoints a three-member Search Committee of senior academics to encourage “eminent persons” to apply, while the UGC appoints a former VC from another university to “observe” the selection process.

A Special Meeting of the University Council is convened. Candidates are interviewed and must make a presentation to the Council Members, followed by questions. Each Council member “gives marks” for seven prescribed criteria: strategic focus (20%), effective leadership (20%), holistic thinking/conceptual skills (10%), academic and research excellence (15%), personal integrity (10%), professional communication (10%) and managerial competence (15%). Marks are averaged, and the Council recommends three candidates to the UGC in rank order. The UGC-appointed observer separately submits a confidential report on the selection process.

This procedure is expected to guarantee quality, but does it? Applications are submitted to the Council Members, who have been appointed on questionable bases, and who are expected to review the applications and give scores, based on objective assessments. But, in reality, most Council Members are manipulated by VC candidates, who often have personal ties with them. The UGC-appointed observer usually has no genuine interest in the outcome. And there is no way for anyone to actually question the Council’s decision once it is made. Although the highest-ranked candidate may ultimately be appointed, the selection remains a political decision made by the President, who retains the discretion to appoint any one of the three.

External reviews also do not look into the promotions of academic staff, except to scrutinise whether there are policies and procedures in place to govern promotion. Academic staff may apply for promotion to Professor once they satisfy the prescribed eligibility requirements, which typically include the period of service, academic qualifications, research and publication achievements, teaching experience, and contributions to the university and wider community. Applications are evaluated against specified criteria, with research output and academic contributions assessed through documentary evidence and expert evaluation. Under the UGC’s scheme for Professors, two experts from outside the applicant’s institution assess specified aspects of research and knowledge dissemination. Again, beneath this technical process, which is externally evaluated, lies a problematic points-based scheme that can be manipulated and abused with impunity.

Rethinking university QA

Like the VC election process and the schemes of promotion for academic staff, QA reviews are open to manipulation. Before a review, there is a chaotic rush to complete evidence gathering and reporting. Academics leave all other work aside, including at times their teaching, to focus on completing documentation and preparing reports. The standardised criteria in the review manuals and scoring sheets often do not reflect differences in disciplines and institutional contexts. But this does not really matter because any serious problems experienced by institutions or programmes are hastily brushed under the carpet to conceal any evidence that could taint the review. The goal is to obtain an A or at least a B grade at whatever cost.

QA may result in positive change if it moves beyond top-down check-box activities towards internally designed and owned processes encompassing all aspects of university governance, led by departments and faculties, and supported by adequate resources. The current QA system needs to be dismantled and replaced by procedures that are accountable, not to the UGC, but to our students and the communities we serve.

(Ramya Kumar is attached to the Department of Community and Family Medicine, Faculty of Medicine, University of Jaffna)

. Kuppi is a politics and pedagogy happening on the margins of the lecture hall that parodies, subverts, and simultaneously reaffirms social hierarchies.

Features

Down Memory Lane — the Grand 20th Edition!

Published

19 hours ago

2026/10/13

Sahan Weerasooriya

Down Memory Lane: Ready to sing again

Yes, Down Memory Lane, the beloved Sing-Along concert series that first struck a chord, way back in 1997, returns for its landmark 20th edition this Saturday, 17th October, at the beautiful Bolgoda Grand Resort, Moratuwa town centre.

Having celebrated its glorious 25th anniversary with the show in 2023, this milestone 20th concert promises to be even more special.

The organisers, the ever-popular Moratuwa Arts Forum, are pulling out all the stops to present yet another unforgettable evening, brimming with camaraderie, fellowship, and pure nostalgia.

Get ready for two-and-a-half hours of non-stop singing as veteran vocalists, from the Moratuwa Arts Forum, will take the stage to lead and inspire the happy audience to sing, sing and sing to their hearts’ content.

The repertoire? Absolutely magical, according to the organisers.

Veteran Arun Dias Bandaranaike: Will handle the evening’s proceedings / Priya Peiris: Event Conceptor

Around 40 golden oldies — from timeless English vintage evergreens and hits from the 50s to the 90s, to toe-tapping calypsos, soulful American plantation melodies, rousing cowboy and Dixieland favourites, aa well as cherished Sinhala standards. All to be sung with much gusto!

This year’s dedicated organising committee comprises Brian Coorey (Chairman), Priya Peiris (Event Conceptor), Hiran Fernando, Suranga Fernando, Viranjan Perera, Hemka Fernando and Neelesh Silva. Guidance and support comes from Moratuwa Arts Forum President Sarana Guneratne and Secretary Chandani Silva.

Adding his signature charm to the evening, as Master of Ceremonies, will be the veteran Arun Dias Bandaranaike.

Don’t miss this landmark celebration of music and memories!

For further details, contact Hiran Fernando on 0772636446 or WhatsApp 0783636446.