Gory bull attacks
Tuesday 23rd May, 2023
Homegrown or autochthonous remedies that the incumbent dispensation desperately adopted, a couple of years ago, to shore up the country’s dwindling foreign reserves and straighten up the ailing economy proved inefficacious, but the modus operandi the Bretton Woods docs have employed to bail out this country apparently has something Sri Lankan about it; the act of shoving loads and loads of bitter economic pills down our throats in the name of economic recovery exemplifies a pithy Sri Lankan saying. Exponential tax hikes prescribed by the IMF and readily implemented by the Rajapaksa-Wickremesinghe regime have landed many fixed income earners, especially professionals, in the same predicament as the ‘man who was gored by a bull after his fall from a tree’. In fact, the plight of these hapless individuals, who used to enjoy middle-class comforts but are now struggling to keep the wolf from the door, is far worse than the proverbial victim in the aforesaid saying; they are being gored and tossed around endlessly by many ferocious bulls. The latest bull attack has come from the banking sector!
In what could be considered a classic example of a double whammy, some banks have arbitrarily increased the fixed interest rates on loans which professionals and others obtained before the present-day leaders bankrupted the country. These unfortunate borrowers, including many of our readers, are complaining that they have had to cough up more money to pay the banking Shylocks, besides being squeezed dry by the taxman. Draconian measures the government, financial institutions and other businesses have adopted to recover their losses, for which the ordinary people are not responsible in any way, have turned many middle-class people into white-collar beggars, as it were.
The number of executive-grade employees who moonlight as cabbies and street food sellers to augment their income is on the rise. No wonder so many professionals are leaving the country, aggravating the flight of human capital, which is sure to stand in the way of the country’s progress.
What’s the world coming to when banks give themselves carte blanche to make fixed interest rates float, with the stroke of a pen? Some banks sought to increase fixed interest rates on their loans a few moons ago, but had to put the scheme on hold due to protests from borrowers, but they have again asked their customers to stand and deliver. Curiously, trade unions and the Opposition have not taken up this serious issue, which affects a large number of people, who will be reduced to penury at this rate.
There is no gainsaying that the local banking system is under severe stress, and the domestic debt structuring will worsen their woes, but that cannot be used as an excuse to fleece their customers. Some banks have not cared to recoup many bad loans given to crooks with political connections. Among them is a top UNP financier. Never do banks hesitate to initiate parate execution proceedings against ordinary defaulters to foreclose on their properties and recover outstanding debts. But they baulk at doing so when the nonpayers happen to have political connections, and pass their losses on to other customers conveniently by adjusting interest rates. The Opposition has alleged that the government is planning to let some of its cronies responsible for defaults off the hook, on the pretext of restructuring local debt. The government has not responded to this allegation, which has to be probed.
Let the Opposition, trade unions and professional associations be urged to take up the issue of some banks jacking up fixed interest rates on loans arbitrarily, and come forward to protect the interests of the voiceless borrowers. Being burdened with a failed government is not the only problem this country faces; the Opposition, too, has not been able to live up to people’s expectations.
Cantankerous Opposition worthies hardly utilise parliamentary time for any useful purpose; they only bellow rhetoric and hurl abuse; representatives like them could be fashioned out of coconut petioles or polpithi, as a local saying goes. They look on as ‘bull attacks’ on people turn gorier, so to speak. Shame on them!
Best antidote to exploitation
Tuesday 6th June, 2023
Most people are labouring under the misconception that every prospect pleases in this country and only politicians are vile. Hence the unprecedented rise of anti-politics during the past several years and the demand that all 225 MPs go home. It is popularly thought that all we need to do is to cleanse politics, and, hey presto, the country will be a better place. The focus of last year’s Aragalaya, which sprang as a people’s response to unbearable economic hardships, corruption, etc., and was later hijacked by some ultra-radical elements with anarchical agendas to compass their sinister ends, was also on ridding the country of corrupt, failed politicians. The battle was lost and won; the popular uprising led to the ouster of President Gotabaya Rajapaksa, but the Rajapaksa family has retained its hold on power by other means. In a way, it has been a case of swings and roundabouts for the general public, who expected a ‘system change’. But the question is whether their lot would have improved significantly even if they had been able to see the back of every corrupt, failed politician. There are many others who are as selfish as politicians and exploiting the public ruthlessly.
The Sri Lankan rupee has thankfully rallied against the major foreign currencies, especially the US dollar, over the past several weeks, and import costs have dropped significantly. The prices of essential food items and fuel including cooking gas have decreased, but the benefits thereof have not been passed on to the public; bakers and eatery owners fleece consumers by keeping the prices of their products extremely high. Private bus operators have benefited tremendously from diesel price decreases, but refuse to bring down their fares. They trot out lame excuses. The same goes for the unscrupulous taxi operators, who have refused to reduce their fares despite decreases in petrol prices and an increase in the fuel quota. The less said about the private hospital Mafia, the better; they exploit the sick with impunity. It has been a double whammy for the public; the state-run hospitals are experiencing various shortages and cannot cope with the demand for free healthcare, and the private sector health institutions fleece them.
Everybody is preoccupied with economic and political reforms these days. The IMF has rammed a slew of economic reforms down Sri Lanka’s throat, and they include the restructuring of some key public sector institutions. One can only hope that this bitter medicine will prove efficacious, and there will not be any social upheavals, which usually result from the IMF bailout conditions. The government has doubled down on its efforts to raise tax revenue and curtail its expenditure. Besides, some law and political reforms are on the drawing board, and much is being talked about the need to usher in a new political culture and bring about a system change. But it is doubtful whether these economic, political and law reforms will yield the desired results unless they are coupled with a robust social reform movement, which alone will help engineer an attitudinal change in people, empower them, inculcate a work ethic, and mobilise them to fight for their rights and work towards common good.
Traders, private bus operators, eatery owners, and others are having a field day at the expense of the public because people are not organised. The most effective antidote to exploitative business practices is for the public to boycott products and services that are unreasonably priced and are of poor quality. In this day and age, the public can be mobilised via social media easily. This is a task for opinion leaders and the various civil society organisations, especially those who claim to be fighting for the rights of the hapless consumers.
A question of legitimacy
Monday 5th June, 2023
President Ranil Wickremesinghe, speaking at the National Law Conference, in Nuwara Eliya, on Saturday, urged the political parties represented in Parliament to join forces and help rebuild the economy. One cannot but agree that all political parties are duty bound to sink their differences and unite, for the sake of the country, to put the economy back on an even keel, for all of them have contributed to the process of ruining it albeit to varying degrees. The President also said that political parties should do so instead of calling for elections. There’s the rub! Does this mean that elections will not be held until the economy is turned around? How long will the government take to accomplish that task? What guarantee is there that it will succeed in doing so? What if it fails to straighten up the economy in the foreseeable future? Will the country be without elections indefinitely in such an eventuality? Efforts to revive the economy, we believe, must not be at the expense of the people’s franchise.
President Wickremesinghe argued that none of the parties with parliamentary representation enjoyed the support of 50% of voters. Opinion may be divided on whether his claim holds true for all political parties; those who endorse or challenge this argument will do so without empirical evidence. The best way its validity can be tested is for the government to hold the much-delayed local council elections, which will not lead to a change of government but enable the people to exercise their franchise, express their will, and, more importantly, help defuse the build-up of anger in the polity.
The SLPP has lost popular support though it polled more than 50% of the total number of valid votes at the presidential election in 2019 and the parliamentary polls in 2020; President Gotabaya Rajapaksa quit and Mahinda Rajapaksa stepped down as the Prime Minister due to public protests. They would not have done so if they had been confident that the people who had voted for them overwhelmingly were still with them. The UNP polled only about 2% of the votes countrywide at the 2020 general election and has only one MP. Thus, the SLPP-UNP administration lacks legitimacy to govern the country, and that is why an early general election has to be held so that the people can elect a new parliament; ideally, it ought to stop manipulating numbers in the current Parliament to retain its hold on power and seek a fresh mandate from the people by holding a snap general election, or at least face local government/Provincial Council elections without further delay.
Public resentment is palpable, and the government has become dependent on the police and the military for its survival, and keeps postponing elections. Political stability, which is a prerequisite for economic recovery, will be at risk as long as the people remain resentful of a failed government, which clings on to power in spite of having bankrupted the country. What the current regime is doing is tantamount to a rapist retaining the custody of his victim! It is only natural that the people have lost faith in the government.
President Wickremesinghe also said at Saturday’s National Law Conference that the majority of people had lost faith in elections, and politics, and whether it was the parliament, the judiciary, the media, trade unions or professionals, the people lacked trust in the entire system. There is a general consensus on this assertion.
The abuse of the National List (NL) mechanism by political parties to bring in defeated candidates and persons of their choice as appointed MPs is one of the main causes of the erosion of public faith in elections. The NL is a constitutional wormhole, as it were, which has to be sealed. Thankfully, all is not lost if relatively high voter turnouts at elections are any indication. Anti-politics, which means people’s hostility towards established political systems, parties, institutions or practices, is manifestly on the rise, and this situation is attributable, among other things, to the presence of many undesirable persons among politicians and people’s representatives, rampant corruption, the abuse of power and public funds, and the prevailing culture of impunity.
Most of the factors that gave rise to last year’s socio-political upheavals are still there; they have the potential to trigger another popular uprising of tsunamic proportions. Hence the need for the government to mend its ways and tread cautiously without suppressing democracy and provoking the public.
The publication of Merril. J. Fernando’s autobiography last month is a useful peg to hang a discussion on the Ceylon tea industry – we advisedly call it Ceylon tea rather than Sri Lanka tea – as the former is the name by which this unique product is known globally. Merril Fernando, of course, needs no introduction. He is very well known in this country as the creator of the Dilmah brand he coined from the names of his two sons, Dilhan and Malik, which he took to the world outside making it the best known nationally owned tea brand in Sri Lanka. As we said in a review of the book last Sunday, MJF is not the country’s biggest tea exporter but his is the best known nationally-owned brand of Ceylon tea in the tea drinking world.
During the British colonial years and the early post-Independence period, tea was our major export and foreign exchange earner. But decades ago garments overtook tea and also, remittances from blue collar workers striking out overseas to support their families back home became a reckonable factor in the country’s foreign exchange budget. Net earnings from tea, obviously, was far higher than what garments, that had by far become the country’s largest manufacturing industry fairly quickly, brought in. That was because the imported input into tea was a fraction of what the clothing factories had to import to manufacture their product. This included not only fabrics but much more. The labour was the major value adding factor in the domestic garment industry.
The major imported input into the tea industry is fertilizer. Like garments, tea growing too is a labour intensive industry. Onetime Finance Minister Ronnie de Mel who presented 10 national budget for the J.R. Jayewardene regime from 1977 to 1988 once famously said that Sri Lanka’s economy sits on a tripod of women workers – those slaving on the tea fields, working in the garment factories and venturing out as domestic servants largely to the Middle East. Never were truer words spoken. The British brought in indentured Tamil labour from India to work on their tea estates under harsh conditions because the upcountry peasantry was reluctant for various reasons to work on the plantations. These were created at tremendous environmental cost on land sold for a pittance under the infamous Waste Lands Ordinance of 1840.
This stipulated that “all forest, waste, unoccupied or uncultivated land was to be presumed to be the property of the Crown until the contrary is proved.” This resulted in the denuding of the country’s mountain slopes clothed with montane rain forests providing the sponge-like catchments for the rivers flowing through the valleys. The price paid was irreparable ecological damage to first plant coffee and then tea. The upcountry peasantry lost their common grazing land and much more to this despoliation that brought fame and fortune to British plantation owning companies quoted on the London Stock Exchange. Ceylon tea soon earned the reputation of being the world’s best and Merril. J. Fernando in his memorable over six decade long journey through the industry retains at age 92 a passion for the product that was the foundation of his success.
Apart from very readable accounts of his upbringing and early years covered in the book, Fernando has dwelt on the exploitation of Ceylon tea by the British whose chief focus was the bottom line. He writes that during the period of his training as a tea-taster in the UK he was greatly distressed “by the ruthless exploitation of our tea industry and its workers that took place in London.” He had developed a great respect for the British as a result of his friendship with many Brits resident her e as well as his employers who controlled much of the tea export trade. But all that was shaken when he realized what was being done in London to Ceylon tea by the British who dominated the global tea trade in Mincing Lane, “the world’s undisputed tea center controlling and manipulating the distribution and marketing of tea from grower countries.” He says that resulted in producers, especially those in Ceylon, being held to ransom adding that we were then more vulnerable to market manipulation than any other grower as about 90% of national production was being exported, a large proportion going to the UK.
A major service rendered to Ceylon tea by Merril Fernando was his resistance to efforts to make Sri Lanka a so-called ‘tea hub’ by importing cheap teas and blending them with Ceylon tea. This would have been a profitable business but at the cost of both the unique character and reputation of Ceylon tea. In the middle seventies, as result of the JVPs 1971 adventure attributed by the then rulers to land hunger, the land reform laws compelled the sale 150,000 acres of British-owned sterling estates at a price of Rs. 1,125 an acre (pounds 42 and 50 pence). It was agreed that the compensation would be “prompt, effective (meaning may be remitted) and adequate.” Payment was concluded over four years. Rather than alleviate land hunger, the plantations were vested in two monolithic state corporation, the Sri Lanka State Plantations Corporation and the Janatha Estates Development Board.
Despite the presence of 23 Regional Plantation Companies managing state-owned plantations leased to them in 14 regions, 70% of Sri Lanka’s tea is produced by nearly half a million smallholders mostly in the low country. Today the industry is hard-pressed for labour with the tea workers lot way below minimum norms. But the industry remains a vital segment of the Sri Lankan economy.
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