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Economic recovery priority No: 1



The Chairman of Bank of Ceylon has said that we may get bailout foreign aid in the fourth quarter of this year, and that if we do not get it by then we may cease to exist as a country (The Island 03.08. 2022)

This ominous warning from a person who knows what he is talking about must open the eyes of those who are agitating and planning to topple governments, chase away presidents and prime ministers, occupy the President’s and the Prime Minister’s residences, change the system and want an election immediately. Such activity would cause instability of the government and a delay in the negotiations for a bailout. We can exist only if somebody gives us some dollars, to tide over these difficult times, until our economy can stand on its own. Fourth quarter of the year starts in October, could we exist until then? Not if these revolutionary ideas are put into practice. Economic considerations must take precedence over political issues at this juncture.

If these people, whoever they are, want to have monthly revolutions what could happen to the country? Haven’t we had enough revolutions, and what good have they done for the country or its youth, apart from getting murdered by both sides? We had a president who was unpopular in the eyes of many, and he was removed. Now we have a president who was not elected by the people, and some people want to get rid of him. What is the guarantee that the same fate would not befall the president who replaces the present one, and the monthly revolutions would not continue until these revolutionaries take over the government? They almost did that, didn’t they, when they attacked the parliament.

The protesters must realise that nobody could have a magic formula to obtain foreign exchange in large amounts in a short time, when there is a global economic crisis. The President and the Central Bank Governor have explained this matter time and again. People must be patient at least until the negotiations for foreign aid are completed and we get some dollars. There is no point asking for quick solutions. The aid givers must convince themselves that we may have the ability to pay back the loans we would be taking. Our friends like China, India, and Japan have their own problems in the present global economic contraction, and may not be able to contribute as they otherwise would have done. Only hope may be the IMF, though their conditions could cause irreparable damage in the long run. But a sinking man cannot be selective in grabbing a life line.

The people must be peaceful and law abiding, and all foreign exchange earning activities – like the apparel and plantation industries, tourism and foreign remittance must function without hindrance. The new administration is trying to enforce law and order, without which none of the above activities could run to their best ability under the trying conditions. The President has spoken at the inauguration of the parliament, and it appears he is sincere and means business. He will not clamp down on peaceful demonstrations, but would not allow violence for that could mean, as the Chairman BOC has warned, the end of the road for Sri Lanka.

Foreign exchange earning capacity should not be allowed to be disrupted, and every effort must be made to improve the balance of payment, in which regard there is heartening news that this has improved in the last month compared to the previous. Such good things are happening now and nothing should be done to jeopardise it. This country, in irreparable bankruptcy and political turmoil, may be annexed by some big power who are waiting in the horizon for such an opportunity.

The present government, though not ideal from the point of view of democracy, has a vestige of stability and law and order, and appears to be trying to solve the economic problem. If ideal democracy is to be restored an election has to be held. Nobody in his right mind would recommend an election at this time. Apart from the fact that the country has no money to hold an election, it would disrupt the negotiating process for foreign exchange, and cause a further delay which the country could ill afford.

Though nobody has said what exactly they want when they ask for “a system change”, going by the colour of their politics and their attempt to occupy the official residences of the President and the Prime Minister, and attempt to march on the Parliament, what they want obviously is to capture state power. Would such an outcome be endorsed by the people? Would that be what the people want? Is that what they wanted when they joined the protest march in their thousands? Would they join and march again in their thousands to install these militant groups, whoever they are, in state power?

The people got on to the streets on 09 July for they believed all their problems were due to the former president’s blunders. They were not planning to enable any revolutionary to capture power. They had been denied their fertiliser, not once but for two seasons, and fuel, gas, kerosene, medicine, and all other essentials were not available. The cost of living was skyrocketing. People were at their tether’s end.

Now the situation has somewhat improved. Fertiliser has been made available, and the minister of agriculture says not to import rice as there is sufficient stocks. The QR system appears to have eased the problem of fuel queues. Cooking gas is available. Further, the people may have vented their pent-up anger on the former president by getting rid of him. Now they may not have the imperative urge to get on to the streets and go after another president. They may also be privy to the knowledge that they could be acting like the cat’s paw in someone else’s power game. They have given a minimum of votes when some of these revolutionaries had contested the elections in the past. Surely the people don’t want to be part of a process aimed at installing them in power, by extra parliamentary methods.

There is another dimension that the people will have to be vigilant about. The US Ambassador seems to be going beyond her diplomatic mandate in interfering in the recent developments in Sri Lanka. She had not allowed the former president to enforce law and order, when it was clearly breached by the forceful occupation of the Presidential Secretariat, and she may have been indirectly responsible for the regime change. Now she is using the same tactics against the present president. She has praised the protesters, notwithstanding their violent actions. Forceful occupation of government buildings is not peaceful assembly. The US was earlier using the LTTE as their tool to keep this country destabilised. As the LTTE is defunct now, they may have found another cat’s paw in the hapless misguided protesting violent youth. S. AMARATUNGA

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Need for best relations with China



(This letter was sent in before the announcement of the government decision to allow the Chinese survey vessel to dock at Hambantota – Ed.)

I once met Pieter Keuneman sometime after he had lost the Colombo Central at the general election of 1977. We met at the SSC swimming pool, where he had retreated since his favourite haunt at the Otters was under repair. Without the cares of ministerial office and constituency worries he was in a jovial mood, and in the course of a chat in reference to a derogatory remark by one of our leaders about the prime minister of a neighbouring country, he said, “You know, Ananda, we can talk loosely about people in our country, but in international relations care is needed in commenting on other leaders”.

Pieter, the scion of an illustrious Dutch burgher family, the son of Supreme Court judge A. E Keuneman, after winning several prizes at Royal College, went to Cambridge in 1935. There he became a part of the Communist circle, which included the famous spies Anthony Blunt, later keeper of the Queen’s paintings Kim Philby, and Guy Burgess. Eric Hobsbawm, the renowned historian commenting on this circle, wrote of the very handsome Pieter Keuneman from Ceylon who was greatly envied, since he won the affections of the prettiest girl in the university, the Austrian Hedi Stadlen, whom he later married. Representing the Communist Party in parliament from 1947 to 1977, soft-spoken in the manner of an English academic, Pieter belonged to a galaxy of leaders, whose likes we sorely need now.

I was thinking of Pieter’s comments considering the current imbroglio that we have created with China. Our relations with China in the modern era began in 1953, when in the world recession we were unable to sell rubber, and short of foreign exchange to purchase rice for the nation. The Durdley Senanayake government turned to China, with which we had no diplomatic ties. He sent R G Senanayake, the trade minister, to Peking, where he signed the Rice for Rubber Pact, much to the chagrin of the United States, which withdrew economic aid from Ceylon for trading with a Communist nation at the height of the Cold War.

Diplomatic relations with China were established in 1956 by S W R D Bandaranaike, and relations have prospered under different Sri Lankan leaders and governments, without a hint of discord. In fact, in addition to the vast amount of aid given, China has been a source of strength to Sri Lanka during many crises. In 1974, when the rice ration was on the verge of breaking due to lack of supplies, it was China, to which we turned, and who assisted us when they themselves were short of stocks. In the battle against the LTTE, when armaments from other countries dried up, it was China that supported us with arms, armoured vehicles, trucks, ships and aircraft.

It was China and Pakistan that stood by our armed services in this dire crisis. More recently, amidst the furore, created by Western nations about human rights violations, China was at the forefront of nations that defended us. A few weeks ago, it was reported that the UK was ready with documents to present to the UN Security Council to press for war crimes trials against the Sri Lankan military, but the presence of China and Russia with veto powers prevented it from going ahead with its plan.

It is in this context that we have to view the present troubles that have engulfed us.President Ranil Wickremesinghe, in the short period he has been in office, has won the sympathy of people by the speed with which he has brought some degree of normalcy, to what was a fast-disintegrating political environment. On the economic front, his quiet negotiations and decisions are arousing hopes.

A shadow has been cast over these achievements by the refusal to let in the Chinese ship to Hambantota, a decision made on the spur of the moment after first agreeing to allow it entry. The manner in which it was done is a humiliation for China, one administered by a friend. We must remember that these things matter greatly in Asia.

These are matters that can be rectified among friends, if action is taken immediately, recognising that a mistake has been made. The President should send a high-level representative to assure the Chinese leadership that these are aberrations that a small country suffers due to the threats of big powers, to smoothen ruffled feelings, and normalize relations between two old friends. The American-Indian effort to disrupt a 70-year old friendship, will only lead to its further strengthening in the immediate future


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A change of economic policies for Sri Lanka



Millions of Sri Lankans are anxiously waiting to see what actions will be taken to make life bearable again.If we follow the example of successful countries we see them exploit their opportunities, and use the wealth created, not to import cars and go on luxury trips abroad, but to re-invest the money proceeds in further projects to bring in even more money. They proceed in this way until their citizens have good standard of living. Probably, the best example of that compounding of wealth is Singapore.

Singapore exploited its geographic advantages. It provided cruise ships with bunkering services and repair, later they provided airlines with refueling and expanded that to one night free stop- overs for passengers to buy luxury goods at their glamorous, tax-free shopping malls. The Japanese were making wonderful new gadgets: cameras, music players, portable radio cassette players, binoculars, all available in the malls and sold tax free!! Lee Kuan Yu forbade the ladies to wear denim jeans, and to wear dresses with hem lines coming down two inches below the knee! He even instructed the ladies to smile! No man could have long hair for fear of arrest. Littering was prohibited, so was chewing gum and smoking butts on the roads and pavements. The place was kept clean!

They used the proceeds arising from all this commercial activity to build housing blocks, develop new roads and other beneficial projects. (Individuals were not allowed to walk away with the profits, just to fritter them away.) Sentosa Island had installed a communications dish antenna connecting it with New York and the financial markets. This was an example of intelligent seizing of opportunities. I account for this intelligent development as due to the high educational and knowledge of Singapore’s progressive management. The result is a firm currency, holding its value.

Something similar has happened to Russia. Russia is rich. It is under progressive intelligent management. Stalin had developed the railway network across the full eleven time zones. But many areas remained to be connected. Putin found the finances to develop coal mines, develop oil and gas deposits and build railway bridges and tunnels for better access to markets and their demand for Russian products. Even as you read this, trains of 70 plus trucks, each with 70 tons of coal are grinding their way to China, day and night. Gas is flowing through an extensive network of pipelines, both east to China and west to friendly countries in Southern Europe. Mr. Putin and his men have succeeded in getting Russia fully functional. And the more Russians there are to spend money, so the more demand for goods and services: shops, etc., providing multiplying employment in Russia.

Mr. Putin wants to build a road and rail link south through Iran to India. A design plan is in the works. It is being discussed with Iran and India. Putin is displaying initiative for the benefit of Russia and its citizens. Putin cares for the citizens of Russia and is creating both wealth and jobs too. Architects are designing attractive living spaces and buildings which provide a better environment for Russians and contractors are building it. Education of Russian citizens is playing a big part in Mr. Putin’s thinking, too. Russia needs a talented workforce.

The result is that the currency, the Ruble is strong and does not devalue. It keeps its value.Belarus, Russia’s neighbour, can also be praised for outstanding development. The population in the big towns is cossetted with amenities and facilities which provides a luxurious way of life for townspeople especially those with industrial jobs. However, it must be admitted, the standard of life for the minority 30% population living in the countryside has yet to catch up. The administration is strict and everyone is law abiding. For example, you can leave your hand phone at your seat while you visit the toilet conveniences and it will remain undisturbed until you return.

Belarus, being a mostly agricultural country has a big tractor manufacturing plant, it has a fertiliser mining and producing plant, it has a commercial vehicle plant, DK MAZ which produces industrial trucks such as fire extinguishing trucks and also produces the most comfortable, bright, low step buses and so on, and of course, Belarus makes its own industrial vehicle tyres. The towns are prosperous and clean and Minsk, the capital is a beautifully laid out city. Town apartment blocks are multi-storied living spaces, but are so well designed and fitted as to provide pleasant living spaces for its people. These reduce urban sprawl across the wooded countryside.

What are Sri Lanka’s strengths? It is a small island thus making communications short and sweet. Its location in the Indian Ocean is a plus, its scenic beauty is a plus allowing a thriving tourist trade for people from colder climates, and its soil and climate allows almost anything to be grown. Therefore its agriculture is a great strength. Its long coastline can provide fish if the fisherised. It has deposits of graphite and phosphates which can be exploited to produce profits for further investment in development projects. It has its illiminite sands which are an extremely valuable asset but need to be controlled and exploitation expanded. It has a whole gem mining industry which need to be managed in way beneficial to the government. It has several government owned businesses which need to be overhauled and modernized to convert losses to profits. The rupee in 1948 was equal to the English pound, now it is around 450 rupees to the Pound. That gives a good description of Sri Lankan past governance.

Profits from projects need to be ploughed back into further projects to bring about a higher standard of living for all its inhabitants. Then the Lankan reputation of being a paradise island with happy people will be restored.

Priyantha Hettige

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Sapugaskanda: A huge challenge for RW



It will be interesting to see if anything fruitful will come of the so-called “investigation” announced by the Minister-in-charge, about what seemed like an outrageous overtime payment to the petroleum refinery workers.While waiting for the outcome of that investigation, I thought of highlighting again the real and central issue that cuts across all loss-making government undertakings in Sri Lanka, such as the CPC, CEB, SriLankan Airlines, etc. that have been mercilessly sucking off tax-payer’s money into them like “blackholes”.

These organisations have been typically sustaining a mutual understanding with corrupt or inept politicians. “Sahana milata sewaya” (service at a concessionary price) was the catchphrase used by them to cover up all their numerous irregularities, wanton wastage, gravy trains, jobs for the boys and massive corruption, mostly with direct and indirect blessings of the politicians.

Here, I’d like to bring out just one example to help readers to get an idea of the enormity of this crisis built up over the past few decades. You’ll only have to look at what seemed like gross over-staffing levels of the CPC’s Sapugaskanda refinery, compared to international standards as shown below:

* Sapugaskanda Refinery – 50,000 Barrels Per Day (BPD); 1,100 employees Superior Refinery, Wisconsin, USA – 40,000 BPD; 180 employees

* Louisiana Refinery (including a fairly complex petrochemicals section), USA – 180,000 BPD; 600 employees

* Hovensa Refinery (now closed) – US Virgin Islands; 500,000 BPD; 2,100 employees.

These are hard facts available on the Internet for anyone to see, but I’m open to being corrected. I doubt if any sensible private investor would even dream of allowing such a level of gross over-staffing in their businesses.

As everyone knows, this is the position in all government business undertakings, as well as in most other government agencies in Sri Lanka. One can say that Sri Lankans have been willingly maintaining a crop of GOWUs (Govt Owned Welfare Undertakings), primarily for the benefit of the “hard-working” employees of these organisations, but at an unconscionably enormous cost to the rest. Obviously, this “party” couldn’t have gone forever!

Will Ranil be up to this challenge? I doubt very much.

UPULl P Auckland

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