Opinion
Economic value of Mahinda Rajapaksa
by Dr Sirimewan Dharmaratne,
former Senior Analyst, HMRC, UK.
Although this may not be doable at all times, it is possible to retrospectively assess the economic impact of crucial decisions. While putting a value on a person may seem unethical or unconscionable, everyone has an economic value. Our lives are valued for myriad of commercial purposes, such as for insurance policies, compensation for work place injuries and death and for various illnesses due to environmental pollution and other such instances. In all these cases, what is valued is the economic life, and not the intrinsic value of the person itself.
The method is ‘what if’ concept; how much could he/she have earned if the person has not died or been incapacitated? The same concept could be extended to assess the value of critical events, such as natural disasters. The method simply is to compare the state before and after the even and put some economic value to the event or the decisionmaker.
Benefits of Mahinda Rajapaksa (MR)
The most seminal event that happened in Sri Lanka during MR regime was ending the war on terrorism in 2009. Friends and foes alike attribute this historic event to MR. Although there are different schools of thoughts on this, winning or to losing a war is ultimately attributed the leadership and not to anyone else. This is because it is the leader that takes decisions and accept all risks. Winston Churchill as the war-winning UK prime minister, Chinese revolution has been attributed to Mao Tse-Tung, and the ending the civil war in the USA has been attributed to Abraham Lincoln. The ensuing discussion and analysis are based on this premise.
Benefits of Ending the War
There is no doubt that there was significant economic revival after the end of the war. The underlying justification is that if he had not taken the decision to end the war, it would not have ended in 2009. As such, whatever the costs and benefits of ending the war can be attributed to MR. While a complicated economic evaluation is not possible within the context of this article, it is possible to see whether we have enough evidence to do a ‘back of the envelop’ economic assessment of ending the war.
Revival of Tourism
One of the unequivocal benefits of ending the war is the massive revival in tourism as seen in tourism statistics. The average tourism spending during the 5-year period before 2009 was about US$ 0.76 billion a year and during the 5-year period after the war was over US$ 2 billion a year. Therefore, the increase of revenue of around US$1.25 bn a year can be safely be attributed to the event of ending the war as this was the only pivotal event that happened in 2009. Assuming that 30% of these spending is net profit, then nearly US$ 2bn was accrued to Sri Lankan businesses during this 5-year period immediately after the war compared to the previous 5 years.
Economic Growth
There was nearly a 5% jump in the GDP growth in the year after the war. That momentum was maintained for the next two years. During the first three years over $16 bn was added to the economy compared to the $8 bn during the three preceding years. Unemployment that was well over 5% in 2009 (and in preceding years) dropped below 5% in 2010, for the first time since early 1990s. On the average unemployment fell by 0.34% year during the 5 years after 2009. No doubt other economic indicators showed similar positive trends.
Other Benefits
It is commonly believed that egregious corruption and irregularities were rife under the guise of war for many years, under all regimes during the 30-year period. These essentially ended after 2009. Then there are other benefits such as improved international relationships, more investments, building of several roads and highways and the general wellbeing of the citizen, which are all hard to quantify in this context. Although, this momentum in growth could not be maintained for a longer period due to regime changes, cronyism, complacency, capricious decision-making, and many other factors, they cannot unfortunately be quantified. While these unconscionable acts may or may not be directly attributed to MR, his cavalier attitude in some instances may have contributed to gratuitous corruption under his watch. Due to these reasons, a vast stream of benefits that could have resulted from the end of war never materialised.
Costs of Mahinda Rajapaksa
There are economic costs and financial costs. Financial costs are those borne by the taxpayer for his upkeep and benefit. These are the costs that are the focus of the ongoing controversy. Economic costs are the costs to the taxpayer arising from decisions that he may have taken. It is important to note that such decisions must have been approved by the parliament and therefore, any responsibility should be held collectively. Nevertheless, for this article we will assume that they are taken unilaterally and exclusively attributed to MR.
Two of the main projects that are constantly being flaunted are the Hambanthota port and the Mattala airport. Both these are portrayed as colossal waste of money. There is ample evidence that these main projects and others were undertaken without much thought. However, as far as this article is concerned, only the losses to the taxpayer resulting from these decisions are considered.
Large infrastructure projects yield benefits far in to the future as they have a very long lifespan. Further, their investments cost is not a loss, but only the losses incurred in their operation. Although, initially made significant losses due to lack of business, with the deal agreed with a Chinese investor in 2016, it appears that the port is no longer costing the taxpayer. In fact, there is already evidence that it could be profitable with the proposed oil refinery. Also, with the opening of the economy for imports, this could be a major trade hub. Therefore, for the purpose of this article, it is reasonable to use the widely quoted loss of US$216 million during the period of 2011-2016.
The Mattala airport on the other hand has incurred about US$140 million loss during the 5-year period of 2017-2022. There is still no evidence that it could be turned into a profit-making venture. There may be other smaller projects that could have made lesser losses. To account for all those, a rather ballpark figure of US$500 million sounds reasonable at least for the purpose of this exercise.
Financial Costs
The main contentious issue at the moment is whether the facilities (particularly the accommodation) at the disposal of MR is justified. Let’s say this current facility is available to MR for a 20-year period from 2015 and the monthly average imputed rent is Rs 20 million a month. Then the total cost to the taxpayer would be about US$16 million. Adding all other benefits that he is entitled to, a figure of US$ 50 million seems to be a reasonable assessment of the as the total cost of maintaining MR for a 20-year period from 2015.
Stolen Money
The main accusation of MR is not the few bad policy decisions that he may have taken or the cost of his retirement, but the colossal amount of money that he claimed to have stolen and stashed overseas. Despite years of accusations, the existence or the amount of this money is yet to be unambiguously ascertained. Unfortunately, there is no paper trail or digital footprint to show that taxpayer money has been siphoned out of the country. There is a further twist to these claims of stolen money. They are only relevant for this analysis, if taxpayer money (from the Treasury, for example) was taken out of the country. On the other hand, gratuitous payments directly deposited in foreign banks (commonly known as commissions) for awarding contracts are irrelevant as far as the taxpayer is concerned. This would only be an issue if the taxpayer was short-changed as a result of awarding contracts. Either way as far as stolen money is concerned, until definitive proof is surfaced, imaginary amounts cannot be taken into account.
Is he worth it?
The total loss to the taxpayer during the MR regime plus is subsequent maintenance costs for a 20-year period from 2015 comes to about US$ 0.5bn. It is important to note that the maintenance cost is only a fraction of the total economic loss due to the two main projects. Based on a very conservative estimate, net benefits from the revival of tourism alone could be nearing US$ 2bn for the 5-year period after ending the war. Then there are all other benefits resulting from accelerated economic growth in the immediate few years after 2009. Therefore, for MR to be a liability to the taxpayer someone will have to find at least US$2 billion of taxpayer money stashed somewhere. While this search is going on, it seems that MR has every right to stay put where he is now, purely from an economic view point.
This perfunctory analysis portrays how even in an extreme situation some objectivity can be imparted to the decision-making process. With some rudimentary information, decisions can be made more objective. Also, a nascent idea could be vastly improved by seeking and including actual data rather than hearsay. For example, the ‘analysis’ presented here could be immensely improved by adding factual information. This is a process that any government should introduce as a matter of principal in all decision making.
Opinion
SL CRICKET SAVED BY THE PRESIDENT
The President has taken the bold decision to get rid of the office bearers of Sri Lanka Cricket (SLC) and appoint an interim committee till such time suitable persons are elected to run the SLC. All Sri Lankan cricket lovers will applaud and endorse President Anura Kumara Dissanayake’s action as the SLC was one of the most corrupt sports organizations in Sri Lanka for a long time.
The office bearers had organized it in such a manner that no other persons could get elected to this den of thieves. They increased the number of clubs as members to collect their votes. Large amounts of funds were doled out to the clubs to which the office bearers belonged.
All cricket lovers would remember how when a previous Minister holding the Cabinet portfolio pertaining to sports tried to get rid of the corrupt officials which the then Parliament endorsed unanimously and how they manipulated to remain in power and get the President at that time to get rid of the Minister instead of the corrupt officials of the SLC.
They were able to get round the ICC too to get what they wanted. The Minister who was appointed in place of the ousted Minister fell into the pockets of the SLC officials and they continued happily thereafter. The Minister was happy and the corrupt officials were happy!
It is not only the elected officials who have to be removed. There are executive employees and other permanent employees who have to be relieved of their duties as otherwise they could get round the incoming officials, and the activities of the bandwagon could go on.
We would appreciate if the President and the Minister in charge would go the whole hog and relieve the SLC of all corrupt personnel so that Sri Lanka’s cricket could get back to its halcyon days again.
HM NISSANKA WARAKAULLE
Opinion
Has Malimawa govt. become Yahapalanaya II ?
Malimawa government and Yahapalanaya are dissimilar in many respects, the most important being whilst Yahapalanaya had to manage with a balancing act in the parliament, Malimawa has the luxury of a massive parliamentary majority. However, they share one thing in common; the main plank for the election of both presidents Dissanayake and Sirisena was their solemn pledge for the eradication of corruption. It looks as if both have failed miserably, on that count!
It did not take very long for Yahapalanaya’s first act of corruption; the bond scam. COPE, headed by the veteran politician D E W Gunasekara, picked on this but to prevent the presentation of the report, Sirisena dissolved the parliament which was done at the request of the Prime Minister Ranil, to whom Sirisena was obliged for the unexpected bonanza of becoming president. This enabled the second bond scam to take place, also masterminded by Ranil’s friend Mahendran, imported from Singapore!
Malimawa convinced the voters that they are the only group that could get rid of the 76-year curse of corruption and made a multitude of promises, most of which are already broken! What is inexcusable is that, in a short space of time, they seem to have become as corrupt as any previous government and they seem to excel their predecessors in doling out excuses. Of course, they have a band of devoted social media influencers who are very adept at throwing mud at their opponents which they hope would help to cover up their sins. How long this strategy is going to work is anybody’s guess!
Some of these issues were addressed in an article, “Squeaky clean image of JVP in tatters” by Shamindra Ferdinando (The Island, 22 April). I hasten to add that, though some of his supporters are still trying to paint an honest image of AKD, he should be held responsible for many of these misdeeds and irresponsible acts.
One of the first acts of the newly elected president AKD was to appoint two retired police officers, who openly worked for the NPP through the Retired Police Collective, to top posts; Ravi Seneviratne as Secretary to the Ministry of Public Security and Shani Abeysekara as the Director of CID. Both of them held top jobs in the CID when the Easter Sunday attack took place and were blamed, by some, that they too failed to prevent this horrendous act of terrorism. In addition, there was a case against Seneviratne for causing accidents whilst under the influence and Abeysekara was exposed as a ’fixer’ by the infamous Ranjan Ramanayaka tapes. No one would have objected had they been appointed after their names were cleared but AKD’s rash decision to appoint them, disregarding all norms, clearly showed what his long-term strategy was. Was this not political corruption?
Now these two tainted officers are heading the search for the mastermind of the Easter Sunday attacks! Are they being used to divert attention away from Ibrahim’s family that was supposed to have funded the project? After all, Mohamed Ibrahim, the father, was on the national list of the JVP, and the two sons were the leading suicide bombers. It is a matter of great surprise that the Catholic church led by Cardinal Ranjith is not demanding the removal of these two officers from the investigation, who obviously have a conflict of interest. It becomes even more surprising when the demand is made for the Deputy Minister of Defence Aruna Jayasekara to resign, for the same reason; as well stated in the editorial, “Of masterminds” (The Island, 21 April).
The first act of the new parliament was to elect ‘Dr’ Ranwala as the speaker and pretty soon his doctorate was challenged. He stepped down to look for the certificate, which he is still looking for! Though some of the ministers too have admitted that Ranwala may not have a PhD, AKD seems silent. When Ranwala was involved in an RTA, police had run out of breathalyser tubes and blood was taken after a safe period had elapsed. Why has AKD no guts to sack him?
Episode of the release of 323 containers, without the mandatory inspections, seems to be receding to the past and the long-awaited report may be gathering dust in the president’s office! It is very likely due to political intervention and we probably will never know who benefitted.
A minister, who claimed that he is living on his wife’s salary and on the generosity of the party faithfuls, seems to have been able to build a three-storey house in a suburb of Colombo. He claims that when he made that statement, his father was alive but has since died and he has inherited everything as he is the only son! What a shame that Marxists do not believe in sharing the family wealth with sisters? Though the opposite may be true, his explanation that he was able to build a house in Colombo by selling the land in Anuradhapura rings hollow!
The worst of all was the coal scam which would have long lasting consequences on our economy. I do not have to go into details as much has been written about this but wish to point out AKD’s role. In spite of ex-minister Kumara Jayakody being indicted by CIABOC, AKD continued to give unstinted support till it became pretty obvious that he had to go. In fact, he is being charged with an offence which was committed whilst he was serving the Ceylon Fertilizer Company which was under the purview of, guess who? AKD when he was the Minister of Agriculture.
Devastating report from the Auditor General,before Jayakody’s resignation, would not have happened if AKD had his way. He attempted a number of times to get one of his henchmen appointed to this coveted post, overlooking those experienced officers in the department. AKD’s political machinations were thwarted thanks to the integrity of some members of the Constitution Council. If not for them, AKD’s nominee would have been in post and, perhaps, his friend Jayakody would still be the minister.
Malimawa seems to have beaten Yahapalanaya rather than being the second!
By Dr Upul Wijayawardhana
Opinion
Pot calling the kettle black?
Doctor Upul Wijayawardhana (eminent physician), posed a riddle for us. He wrote about that island Sri Lanka as ‘ this little dot in the ocean’ when deriding the remark of President Dissanayake who had said that Sri Lanka was a hunduva , a term that indicated a small volume: me hunduve inna puluvan da? (Can you live in this restricted space?) Most sensible people, even uneducated, judge that the volume of a little drop (of whatever) is smaller than that of a hunduva; so is weight. When the learned doctor emphatically maintains ‘….we are not a hunduva’ but ‘… a little dot in the ocean…’, is the pot calling the kettle black or worse?
Physically and population wise, Sri Lanka is neither ‘a little dot’ nor ‘a hunduva. This is all in the rich imaginations of Dissanayake and Wijayawardhana. I once counted that there were more than 50 members of the UN who were smaller than Sri Lanka in physical and population size. England was a sizeable island with a small population in the northwest corner of Europe in late 18th century when it began to become what China, with 1.3 billion people and jutting out to the Pacific, is now. From about 1850, when the population of Great Britain was about 20 million, less than that of Sri Lanka in 2026, it ruled more than half the world. Besides, do not forget Vanuatu, Kiribati, Cook Islands, Antigua and Barbuda, Barbados, Lesotho and New Zealand (who habitually beats us at cricket). New Zealand with 5 million population played against 1.5 billion population India (1:300) for the T20 cricket championship a few weeks ago. I quietly wished New Zealand would win; so much for crap about dots in the Indian Ocean or the south Pacific.
Dr. Wijayawardhana also wrote about history and about ‘The achievements of Hunduwa’. The massive reservoirs and extensive irrigation systems in rajarata and ruhuna as well as the stupa are indeed tremendous works of irrigation and bear witness to superior ingenuity and organising ability, for the time they were built. They compare very well among structures elsewhere in the ancient world. Terms like ‘granary of the East’ must be taken with more than a grain of salt. Facile use of such terms does not take account of whatever shreds of evidence there is of adversity in those times. Monsoon Asia over the ages has more or less regularly suffered from floods, droughts and consequent famines. The last dire famine was in Bengal in 1944. The irrigation works in Lanka were a magnificent response to those phenomena. The modern response has been scientific agriculture making India a major grain exporter, from near famine conditions in 1973-74. Recall Indira Gandhi’s garibi hatao (eliminate poverty) speech to the General Assembly of the UN, that year.
The bhikkhu who wrote down the tripitaka in aluvihara did so because there was the threat of a severe famine in the course of which learned bhikkhu might have come to harm. Buddhist thought over centuries had been passed from generation to generation vocally (saamici patipanno bhagavato savaka (listener) sangho) and the departure from that tradition must have required a major threat of famine. There are stories of bhikkhu from Lanka fleeing from dire straits. In the same vein, while the mahavamsa speaks of kings and their valiant deeds, there is little account of the large mass of little people who lived then. Sensible teaching of the history of a people must include the history of as much of the people as possible and some idea of the history of other peoples in comparable times to avoid feeling dangerously smug and arrogant, which we have seen many times over.
Usvatte-aratchi
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