Editorial
Hobson’s choice
Monday 17th June, 2024
The SLPP-UNP government is crowing about the release of the third tranche of the IMF loan, and has undertaken to fulfil some more bailout conditions such as the introduction of an imputed rental income tax. It has said the new tax will affect only the high-net-worth individuals, but the proof of the pudding is said to be in the eating. We will see what the new tax is really like only when it is implemented. The SJB and the JVP/NPP have vowed to renegotiate the IMF agreement in case of winning the next presidential election so much so that it is being speculated in some quarters that a regime change might lead to a derailment of the ongoing IMF programme.
The IMF has addressed some concerns being expressed about the continuity of its programme in view of the next election here. IMF Chief of Mission for Sri Lanka Peter Breuer has revealed what the IMF expects Sri Lanka to do. Pointing out that it had made good progress in terms of economic recovery, he told the media the other day that it was not yet out of the woods. He stressed the need to ‘safeguard the hard-won gains, and avoid slipping into another crisis’.
As for the concerns about the future of the IMF bailout programme here, he said the IMF’s perspective was that achieving its programme’s objectives was the key priority to give Sri Lanka a chance to emerge from the current crisis; the IMF was willing to listen to different views on how those objectives can be achieved and alternative proposals needed to be realistic and achievable within the timeframe of the programme. Reading between the lines, it will be a case of Hobson’s choice for Sri Lanka whoever wins the upcoming presidential election.
The IMF programme, at the present stage, requires Sri Lanka to do basically two things—expediting external debt restructuring and increasing state revenue substantially. These conditions make economic sense, and have to be met, however difficult they may be. Thankfully, external debt restructuring is said to be on course, but the revenue targets have not been achieved yet. The IMF has set guidelines, and the incumbent government or a future administration will have to meet the specified revenue goals.
What one gathers from Breuer’s observations is that the IMF does not mind the means to that end. If the government streamlines revenue collection by giving Inland Revenue, the Customs, the Excise Department, etc., a radical shake-up, while casting the tax net wide with action being taken to ensure compliance and curtail widespread waste, it will be able to achieve the revenue targets set by the IMF without heaping more burdens on the public. But it has opted for the easiest way out––squeezing the ordinary public dry.
The main presidential candidates from the Opposition have given an undertaking that they will continue with the IMF bailout programme but with some changes thereto. However, their economic policies, as outlined in their leaders’ speeches are populist and unrealistic; they are based on lofty ideals and clientelism rather than the harsh economic reality and drastic action that has to be taken to prevent the economy from going into a tailspin again.
The UNP is no different; it is giving away rice, etc., and promising much more in case of winning the next presidential election. The SJB is raising funds and spending part of it on donations such as buses and smart classrooms for schools. It is promising tax reductions and far-reaching welfare measures such as a mid-day meal programme for schoolchildren in case of being able to secure the executive presidency. The JVP/NPP is collecting funds both here and overseas while giving away nothing. It is only promising to create what can be described as a welfare state if it is voted into power.
Given the situation the country finds itself in and the tough bailout conditions it has to fulfil to emerge from the current economic crisis, all chances are that the prospective presidential candidates’ promises of delivering the public from suffering overnight will be pie in the sky.
Editorial
Shadow education in spotlight
Thursday 28th November, 2024
The JVP-led NPP government has disappointed its detractors, who expected it to act like a bull in a china shop, after capturing state power. It has chosen to act with restraint, and cross the river by feeling the stones, as legendary Chinese leader Deng Xiaoping said. So, Cabinet Spokesman and Minister Dr. Nalinda Jayatissa’s assurance, on Tuesday, that the incumbent government would not ban private tuition came as no surprise. However, in saying so, he placed shadow education in the spotlight. At this early juncture, the new administration may not be able to reveal how it will handle issues concerning private tuition, but it will have to treat them as a high-priority policy concern and act accordingly.
Since its ascension to power, the JVP has demonstrated that it is no longer a dyed-in-the-wool Marxist outfit; its prolonged stay in electoral politics and numerous honeymoons with the non-Marxist parties along the way have had a mellowing effect on its revolutionary ideology. At present, its policies arguably reflect a blend of left liberalism, libertarian socialism, and some elements of Marxism. So, the captains of the shadow education industry, as it were, need not worry about a ban. Above all, they themselves campaigned very hard for the JVP-led NPP’s victory’, didn’t they?
Shadow education is not a phenomenon limited to Sri Lanka. The International Handbook on Education Development in Asia-Pacific (2022) informs us that private tuition is prevalent in several rich countries of East Asia, notably Japan and South Korea as well as in lower-income countries in South and Southeast Asia, such as India, Sri Lanka and Cambodia; it is also flourishing in Kazakhstan, Myanmar, etc. Private supplementary tutoring market is reportedly expanding in Australia as well. Increasing access to the Internet has given a big fillip to the growth of shadow education.
In Sri Lanka, private tutoring services that mimic curricula prescribed for public schools has been taken for granted all these years just like sidewalk hawking. They lack accountability and are free to charge fees, according to their whims and fancies. No serious effort has been made by successive governments to regulate shadow education despite its educational, social and economic implications. Researchers such as Achala Gupta and W. Dawson have pointed out that private tuition centres reproduce social class inequality created by a formal education system. Besides, in Sri Lanka, shadow education takes a huge chunk out of household income. According to available data, 65% of urban households and 62% of rural ones invest in private tutoring in this country, which takes pride in its free education system!
A ban on shadow education is uncalled for, but if action is taken to ensure that the state sector teachers carry out their duties and functions properly, there will be no need for private coaching, which is an indictment of the public school system. We have witnessed countless teachers’ protests, demanding better pay, etc., during the past several years. Some leaders and members of teachers’ trade unions have entered Parliament from the NPP. If the new government is keen to develop the public education sector and restore the people’s trust therein, it will have to ensure that teachers in state-run schools and universities work harder to raise the standards of their institutions.
President Anura Kumara Dissanayake has announced that students will be given an allowance for purchasing school supplies. This scheme will stand most parents in good stead amidst the current economic crisis, but one hopes that it will be properly targeted so that the needy students will benefit therefrom and it will not lead to a waste of state funds. However, the President can render a bigger service by giving the public education sector a radical shake-up and ensuring that schools provide a better education so that students will be less dependent on unregulated private supplementary coaching, which takes a heavy toll on their physical and mental wellbeing, and aggravates their parents’ pecuniary woes.
Editorial
Protests against Adani in India
Wednesday 27th November, 2024
Protests have erupted in India against Gautam Adani and his business empire in view of damning corruption charges against them over some renewable energy projects. Adani and seven others have been charged in a bribery and fraud case in the US. A federal court has issued arrest warrants for him and his nephew.
The Indian Opposition threw both Houses of Parliament into turmoil on Monday, causing them to be adjourned over the allegations of corruption against Adani. The Congress, which led the protest, has however said it will not push for a washout of the entire session over the corruption issue, which it will keep going because attacking Adani is the most effective way to discredit and hurt its bete noire, Prime Minister Narendra Modi, who helped Adani Group achieve a phenomenal growth and a global reach.
Adani has come to be dubbed Modi’s Rockefeller, and the corruption issue has put Modi and his BJP-led government in a spot. If the Modi government opts to handle the Adani issue in such a manner that it will be seen to be partial to the tycoon under a cloud, it will incur more public opprobrium, and at the same time it cannot afford to resort to a course of action that will damage Adani Group’s interests. It thus finds itself in a dilemma. The possibility of protests against Adani spreading and gathering momentum cannot be ruled out, according to media reports.
The BJP-led government has weathered numerous protests all these years, especially a protracted one by farmers, but the issue the Opposition and others have chosen to flog this time around in a bid to inflict severe damage on the Modi administration is different.
An anti-corruption drive has a broad scope, appeals to people across all demographics and can therefore be used to mobilise them, especially the social media savvy rebellious youth, against the Modi government regardless of their political, ethnic, religious and caste differences. There’s the rub
One may recall that, in 2011, Anna Hazare triggered a wave of anti-corruption protests across India, but that movement was not aimed at toppling a particular government as such. His campaign however had a lasting influence on Indian politics; Arvind Kejriwal, a champion of good governance, formed his Aam Aadmi Party (AAP), in 2012, with the goal of battling corruption and swept the Delhi Legislative Assembly elections. He has since served three terms as the Delhi Chief Minister, and AAP governs two Indian states. This is a testament to the power of anti-corruption campaigns.
Changing geopolitical dynamics in the region compel one to view what is unfolding in India against the backdrop of the Arab-Spring-type protests that have swept across South Asia, and brought about regime changes in Sri Lanka and Bangladesh; the ousted governments have alleged foreign involvement in protests against them. Former Pakistan Prime Minister Imran Khan said something similar after being removed from office in 2022.
Canada has carried out a frontal attack on India on the diplomatic front over the killing of a prominent Sikh activist on its soil. There seems to be more to Canada’s aggressive reaction than vote bank politics; otherwise, Ottawa would not have gone so far as to tarnish the image of the Modi government. It is being asked in some quarters whether the deterioration of relations between Ottawa and New Delhi will lead to India’s international isolation, with some western nations having taken a united stand on the issue. The US and the UK have come out strongly in support of Canada; they have urged India to cooperate with Canada in investigating the aforesaid killing.
India and China are mending walls. Their trade relations are improving, and they are keen to resolve border disputes diplomatically. BRICS is emerging stronger. India has maintained its strong ties with Russia; it has been buying Russian oil amidst sanctions. It became the top importer of Russian crude oil last year. Russian President Vladimir Putin is expected to visit India amidst US efforts to isolate him internationally. Europe has received large volumes of petroleum products sourced from Russia via India, despite the western sanctions on Russia, according to international media reports. These are obviously not to the liking of the western bloc, which has neither permanent friends nor permanent enemies.
The Modi government will be lucky if the anti-Adani protests do not develop into something like what Sri Lanka and Bangladesh have experienced.
Editorial
Shocking delay in delivering relief
Tuesday 26th November, 2024
Taxes and tariffs increase in leaps and bounds, placing heavy burdens on the public, in this country, but reductions therein come in dribs and drabs, if at all. Governments are very efficient when they squeeze the public dry, but their high-octane performance is sadly absent when they are required to grant their victims some relief. The same holds true for the private state sector, which also keeps the prices of essential goods and services artificially high, making the adverse impact of the current economic crisis on the public even more unbearable.
It has been reported that electricity consumers will be denied the benefit of a tariff reduction this year because the Ceylon Electricity Board (CEB) has not presented the proposed tariff revision to the Public Utilities Commission of Sri Lanka (PUCSL) for the latter’s approval. The CEB was to submit the proposal latest by 22 Nov., but it has asked for two more weeks. The PUCSL needs a few weeks to peruse the proposal to be submitted before making a final decision, we are told. This shows the callous disregard the CEB has for the public crushed under a heavy economic burden. If it had been required to effect an upward tariff revision, the CEB would have worked it out and presented it to the PUCSL in double quick time.
The PUCSL, as the power sector regulator, is not entirely blameless for this sorry state of affairs. What action has it taken to pressure the CEB to submit the proposed tariff revision? It should have used its regulatory power to make the CEB panjandrums expedite the formulation of the tariff revision proposal so that consumers could be given some relief without delay.
It has been reported that Sri Lankans pay about 2.5 to 3 times more for electricity than their counterparts in other South Asian countries, but the CEB is still sitting on its tariff revision proposal. Unfair as it may be to expect the new government to carry out all its election pledges immediately, action could have been taken to make the CEB finalise the tariff reduction in question fast. What the CEB is required to do is not as difficult as a space engineering project; it only has to do some cost calculations and adjust prices accordingly. Why the CEB personnel, especially the highly-paid engineers, take so long to carry out that task defies comprehension.
Meanwhile, the power sector trade unions have reportedly demanded year-end bonuses for the CEB employees on the grounds that their institution is making profits. One is elated that the CEB is no longer in the red, but the trade unions have stopped short of revealing how it has been able to make itself profitable. It has done so by jacking up tariffs, and its profits must be passed on to consumers. Before asking for bonuses and pay hikes, the CEB workers must provide a satisfactory service to the public, who pays their salaries.
The Ceylon Petroleum Corporation (CPC) is also slow in working out price reductions much less revealing when it is planning to do away with the 50-rupee surcharge imposed on fuel to enable it to clear its debt. President Anura Kumara Dissanayake, taking part in a television interview, which was full of softball questions intended to help him score heavily just before the last general election, claimed that he was not aware of how much of the CPC’s debt remained to be paid back, and refrained from saying when the surcharge would be abolished so that a substantial fuel price reduction could be effected. Information about the CPC’s debt, etc., should be readily available, especially to the Minister in charge of energy and the President. The government ought to reveal when the fuel surcharge will be removed. Or, is it that the CPC has already recouped its losses at the expense of the public?
The PUCSL must deal with the CEB’s noncompliance stringently, and provide electricity consumers with much-needed relief. Mere rhetoric won’t do.
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