Cash from wonder herb Komarika
Many years ago President Ranasinghe Premadasa had a favourite slogan: “Big investor, small producer.” This related to a strategy of helping the rural agricultural community of this country, comprising a very large segment of Sri Lanka’s population, to enhance their incomes and lifestyles by cultivating largely non-traditional crops. What the president, well known for his genius of addressing and overcoming seemingly insurmountable challenges, was looking for was largely private sector investment for establishing processing factories, nurseries and extension services that would provide guaranteed markets for outgrower agricultural production. Another such project with Aloe Vera, a wonder herb, (Sinhala Komarika) is now in the pipeline.
This fleshy, cactus-like plant, ubiquitous in many home gardens in the country, has been known for centuries for its medicinal, skincare and a myriad of properties. It is used as a treatment for heartburn, as an alternative mouthwash, blood sugar, digestion and even in the treatment of breast cancer. It has been in the Ayuveda Materia Medica for eons and is a common home remedy for burns. Its many amazing properties are being continuously unlocked and, with today’s appetite for natural products, commands a market worth billions of dollars in the western world. We in Sri Lanka and our South Asian neighbors are very familiar with the manifold uses of this herb which grows well even in the dry zone areas of our country.
The government has approved a USD 783 million project to commercially grow the herb in the Anuradhapura district targeting abundant export markets. This involves leasing 66 acres of government land to a company called Aura Lanka Herbals (Pvt) Ltd. owned by a businessman named Viranjith Thambugala. It’s website claims that it is the largest privately-owned agro project in the country with a focus on finding and identifying bare land not cultivable due to the lack of water. Aura is confident that the very ambitious project of a diversified business group that’s into many other areas including gems, will create thousands of job opportunities. The capital investment for this project according to the Government Information Department is USD 300 million. It envisages harnessing privately owned and government-granted land and the business plan appears to be a modern processing factory, plant nursery and outgrower mobilization model used before by Pelwatte Sugar and others.
Long before Mr. Premadasa and his ‘Big investor, small producer’ model germinated, the Ceylon Tobacco Company owned by the giant multi-national, British American Tobacco (BAT), succeeded in eliminating the need for importing tobacco leaf for their super-profitable cigarette manufacturing business by ensuring that small farmers grew the tobacco they needed right here in Sri Lanka. A surplus was produced making possible tobacco leaf exports to other BAT production units of their sprawling global business empire. Ceylon Tobacco did not build large factories for this purpose but funded tobacco curing barns owned by small entrepreneur in the growing areas. Farmers were provided with extension services helping them to improve both the quality and quantity of their product purchased at guaranteed prices to supply the cigarette factory in Colombo. This proved to be a huge success benefiting all stakeholders.
There is no need to belabor the fact that tobacco is a most harmful industry. Ironclad evidence of this has been widely disseminated for several decades. Yet the tobacco industry continues to survive on the face of the earth on a flimsy argument that smoking is an adult choice. Despite regulatory measures worldwide, including health warnings on cigarette packs, and the price stick that has been long used in many countries including ours to make smoking a most expensive habit, people continue to smoke out of nicotine addiction or plain stupidity. Governments worldwide reap enormous revenue from sky high ‘sin’ taxes on tobacco. Cigarette manufacturers propagandize their massive tax payments to governments, including our own, to hammer home the message that they provide a significant slice of government revenue. The counter argument that smoking costs the healthcare system more than the revenue it generates is commonly bruited. Be that as it may, tobacco growing in Sri Lanka is now discouraged if not prohibited altogether, and the early story is now history.
There have been other successes in diversifying non-traditional agriculture by private investment encouraging production. One example is gherkins which are widely grown in our country for processing the pickles that are an essential relish in hamburgers. Readers would know that these are finger-length cucumbers pickled in brine that are unsuitable if they grow too long. Our supermarkets have long stocked the over-sized gherkins which, though unsuitable for export pickles are widely used for salads and other preparations. Hayleys was among the companies that pioneered this thriving business and commands a dominant market share in this product that has greatly benefited farmers here. There are other players too catering to the global demand for pickled gherkins.
Pelwatte Sugar which attracted investment from a global giant, Booker Tate, and other government-owned sugarcane growing and processing projects, despite massive tax and other incentives did not take the country anywhere close to the envisaged self-sufficiency. What happened was that the potable alcohol byproduct of sugar molasses proved more profitable than the production of sugar. Pelwatte is now back in government hands. Although it does provide an income for peasant outgrowers in the Moneragala district, among the poorest in the country, they have not been able to lift themselves above subsistence levels of existence. Like sugar, the new aloe vera project looks promising on paper. Hopefully it will achieve the desired result.
Tissue of lies and other issues
Monday 27th March, 2023
There is no bigger lie than the oft-repeated claim in some quarters that the 21st Amendment to the Constitution has helped strengthen democracy by ridding vital state institutions of dirty politics. Perhaps, the doormat at the entrance to the President’s Office receives better treatment than the supposedly independent Election Commission (EC), which suffers many indignities at the hands of some government politicians.
Prime Minister Dinesh Gunawardena was economical with the truth, which he also stretched and bent, in Parliament on Friday, when the Opposition questioned him on the postponement of the local government (LG) elections. The PM, who is also the Minister of Provincial Councils and Local Government, said he would meet the members of the EC for a discussion on poll-related issues soon. There is nothing to be discussed about elections! The government should either allocate funds for the LG polls or officially inform the public that it is scared of facing an electoral contest and therefore cannot hold the mini polls. Its refusal to release funds for elections on some flimsy grounds has only eroded public confidence in the electoral process, and given a turbo boost to anti-politics, which is manifestly on the rise and rapidly eating into the vitals of the state.
It is a pity that PM Gunawardena, who gained national prominence by standing up to a dictatorial UNP government under President J. R. Jayewardene, taking up the cudgels for the people’s franchise and winning the Maharagama by-election, in 1983, against tremendous odds, is now backing those who are all out to put off elections. President Jayewardene scrapped the 1982 general election for fear of losing his five-sixths majority in Parliament, and held a heavily-rigged referendum instead, undertaking to hold by-elections in the electorates where the UNP would lose. He had to hold 18 such by-elections, four of which were won by the Opposition despite large-scale rigging and violence unleashed by the UNP. Anil Moonesinghe, Richard Pathirana and Amarasiri Dodangoda won the Matugama, Akmeemana and Baddegama electorates, respectively. Forty years on, Gunawardena and the late Pathirana’s son, Ramesh, are backing Jayewardene’s nephew, President Ranil Wickremesinghe, who is putting off elections!
Unfortunately, it is Finance Ministry Secretary Mahinda Siriwardena who has had to take all the flak for not making funds available to the EC. He has become a soft target that everybody who lacks the courage to take on President Wickremesinghe turns on. Government Printer, Gangani Liyanage, is also in a similar predicament. Siriwardena allocated funds for the EC, albeit in dribs and drabs, before being asked by the Cabinet and the President in no uncertain terms to stop doing so. The government has pinioned him to the wall, and the Opposition worthies are punching him, and not those who deserve their blows. Let those heroes be urged to pluck up the courage to attack the President instead of turning on the public officials whom the government has put in the straitjacket of zero-based budgeting. These mandarins find themselves in an unenviable position; the government is preventing them from carrying out their duties and functions according to their conscience, and the Opposition is bashing them.
The SLPP MPs keep saying that they want the LG elections held. It is they who postponed the mini polls first, in 2022. However, if these politicians who are as crooked as a barrel of fish hooks are being truthful for once, then it will be seen that all members of Parliament, save the single UNP member and perhaps several others who have pledged their allegiance to President Wickremesinghe, are against the postponement of elections, and, worse, the President is refusing to allocate funds for the LG polls against the will of the vast majority of MPs! Parliament controls public finance, and therefore it must be allowed to decide whether to allocate funds for elections. Let a resolution be presented to Parliament to that effect and a vote taken thereon urgently.
Minister Kanchana Wijesekera informed Parliament, on Thursday (23), that President Wickremesinghe had asked for a division by name on the government’s agreement with the IMF so that the public would know who was supportive of the IMF programme and who was not. The same modus operandi could be adopted, if a vote is taken anent the LG polls, so that the public will know who actually wants the elections put off. This is the most democratic way of deciding whether to hold the LG polls or postpone them.
North Korea is reported to have recently tested a secret weapon capable of causing tsunamis. The Rajapaksa-Wickremesinghe regime, which often warns that Sri Lanka might end up being a country like the hermit kingdom unless its economic programme is followed, has resorted to an ill-advised course of action that is fraught with the danger of triggering a tsunami of public anger. Its members have apparently forgotten the firenado, as it were, which hit them in May 2022.
More heavy lifting to be done
As President Ranil Wickremesinghe tirelessly stressed, the signing off on the Extended Fund Facility (EFF) with the International Monetary Fund marks a new beginning. “Forget the past and the old games,” he has said seeking the cooperation of both the opposition and the media for a great leap forward. He has made the point that the IMF arrangement of USD 2.9 billion opens the doors for further credit adding up to USD 7 billion from elsewhere. When he met editors and other media heads on Thursday he said we have to continue negotiations with bilateral and multi-lateral lenders as well as private creditors which he admitted would be the most difficult.
The bad news when this was being written on Friday was that unless there is a dramatic change of heart on the part of the executive, the likelihood of the scheduled local government elections in the foreseeable future appears more than remote. There are, of course, a clutch of cases before the courts at present and which way the determinations will go is not clear right now; also in which direction the dice will roll once the courts rule. But it is patently clear that both the president and the government want these elections as much as they want a hole in the head.
There is no need to labour the reason why the incumbent establishment does not want local elections at the present moment. This, notwithstanding SLPP General Secretary Sagara Kariyawasam’s mealy-mouthed protestations that his party does not wish these elections put off. The electorate is very well aware that these elections cannot mean a change of government. Wickremesinghe is safely ensconced on his presidential throne until Gotabaya Rajapaksa’s term runs out in November 2024. Wickremesinghe is constitutionally empowered to dissolve parliament whenever he wishes from now until then. That’s the whip-hand he holds over his SLPP backers who made him president. It will safely ensure that they will not rock the boat during his tenure.
Just as much as the president and his government do not want any election in the short term, the opposition parties are literally panting that these be held soonest for reasons that are all too obvious. The last time the country elected local bodies was in February 2018 and the Rajapaksa party was the comfortable winner. The credit for this within the SLPP was widely apportioned to Basil Rajapaksa, its national organizer. That election victory heralded the coming of Gotabaya Rajapaksa in November 2019 and the Mahinda Rajapaksa government the following August. This is why the opposition, principally Sajith Premadasa’s SJB and the JVP-led National People’s Power (NPP), is striving might and main to have this election one way or another. The present signal is that they will not succeed in this endeavour. But as in cricket, there is no certainty in the outcome.
Though the president requested that the old games must not be played any longer, his supporters don’t practice what he preaches. There was a vulgar display of firecracker lighting, in true Sri Lankan style, greeting the announcement that the IMF deal was through. Everybody and his brother well know that this polluting lighting of strings of firecrackers greeting election results, politicians arriving at meetings and other similar events are funded by the politicians themselves. Some ghouls even lit crackers when President Premadasa was assassinated. We don’t know whether last week’s cracker lighting was a command performance or of old habits persisting. Whatever it was, it was unseemly.
The mere fact the IMF deal is through does not mean that the country is going to emerge from the economic morass in which it is mired. A great deal of heavy lifting remains to be done. The initial benefits cannot be more than a trickle. Possibly the June negotiations down the road may be an opportunity to offer some tax relief to professionals loudly protesting that the new rates are totally unrealistic. We run a letter from a retired Commissioner General of Inland Revenue in this issue who says that in his view, the problem is not with the rate of taxation which is between six and 36% but with the exemption threshold.
He rightly says that given today’s hyper-inflation. high cost of electricity, water and essential food, the Rs. 1.2 million exemption threshold is far too low. He believes that if this is raised to at least Rs. 1.8 million a year, it may be possible to win the unions over and reduce the tax burden on high income professionals. He has said this should not impact on the IMF agreements and the time has come for a compromise between the government and protesters. Clearly the now retired writer will not have access to actual numbers. But given his long service in the tax department, he would have an instinct for these matters.
It is also pertinent to say here that it is time the government makes a statement about the safety of the country’s banking sector. There are many worries on this score particularly after what happened recently in the U.S. and in Switzerland. It is well known that our state banks have been captive lenders to insolvent state-owned enterprises with such loans underwritten by the government. The fact that the IMF deal was successfully concluded, no doubt, is a reassuring factor about the stability of our commercial banking system. Nevertheless, a statement from the government will reassure constituents.
Political pole dancing
Saturday 25th March, 2023
There is no such thing as national interest in Sri Lankan politics, as is public knowledge. What looks like it is only self-interest in disguise. One often has politicians in this country saying they are promoting national interest, but what they are actually doing is pursuing self-interest. It is against this backdrop that former President Maithripala Sirisena’s claim that his love for the country has driven him to call for a national government to tackle the current economic crisis should be viewed.
Sirisena is full of praise for President Ranil Wickremesinghe and the government for having secured an IMF loan, and insists that there is nothing wrong with the conditions on which the extended fund facility has been made available! Sirisena was one of the bitterest critics of the incumbent dispensation, and there was bad blood between him and Wickremesinghe, but he is now backing them to the hilt. What has made him do an about-turn?
Sirisena has chosen to perform political pole dancing, as it were, to humour the government leaders since last January, when the Supreme Court (SC), which heard a fundamental rights violation petition against him and several others, ordered him to pay Rs. 100 million by way of compensation for his failure to prevent the Easter Sunday carnage in 2019. The SC order prompted those who are seeking justice for the victims of terrorist bombings to renew their demand that criminal proceedings be instituted against Sirisena, as recommended by the Special Presidential Commission of Inquiry, which probed the Easter Sunday terror strikes. Sirisena is now at the mercy of President Wickremesinghe, who alone can prevent the Attorney General’s Department from taking criminal action against anyone.
During the final stages of the Yahapalana government, Sirisena wronged Wickremesinghe, having secured the coveted presidency with the latter’s help in 2015. He stooped so low as to join forces with the Rajapaksas in a bid to sack the then Prime Minister Wickremesinghe although he had made a solemn pledge to throw them behind bars for what they had done during the Mahinda Rajapaksa government. In an unexpected turn of events, Wickremesinghe and the Rajapaksas are now savouring power together; Sirisena is seeking a political menage a trois in a bid to save his skin more than anything else.
Unfortunately for Sirisena, the Rajapaksa-Wickremesinghe government has no need for him. It knows that he is only trying to make a virtue of necessity, for most of the SLFP MPs (elected from the SLPP) numbering 14 have already crossed over! But Sirisena is not likely to abandon his efforts to make himself attractive to the government, given his desperation to avoid criminal action over the Easter Sunday bombings.
If Sirisena’s worst fear comes to pass, he will find himself in jail, and his political career will come to an end in such an eventuality. So, he is doing his darnedest to be in the good books of President Wickremesinghe and the government and will not hesitate to subjugate the policies of the SLFP to his self-interest.
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