Connect with us


How does Sri Lanka hope to get out of the present crisis?



by Sunil Abhayawardhane

It is only a matter of time, before even those who are supporting us with bi-lateral assistance, would ask how we intend to overcome the situation we are presently in.

If the answer would be that we expect the situation to get back to ‘normal’ with adequate supplies of fuel, food and medicine, it would be utterly unconvincing, as the ‘normal’ situation that prevailed, was what caused the present situation in the first place.

Even in that ‘normal’ situation, we still required external support to get by. The real problem lies in our balance of payments, which has been chronic over the years.

The IMF, in its characteristic style, focuses on the symptoms and not the cause of the problem. Therefore, one should not place much hope in an institution that could not come up with proper practical solutions for the developing world.

We need to develop export industry, which has been neglected and expected finance led growth to see us through. Even the euphoria that was created with the Port City Project to induce flow of Foreign Exchange seems unrealistic, at least for the present.

The present exercise is only directed to make the existing debt ‘sustainable’.

What do we do?

There are no short cuts to development and that should be well understood. Developing manufacturing industry should be the main thrust that would be the core that would draw other possibilities that would develop simultaneously.

We should avoid the economy to be hijacked by the financial sector and keep manufacturing as the base of our industry for long term prosperity.

Some possibilities

Some of the areas that could be designed and developed for immediate implementation are listed below.

1) Increase local textile manufacture for the apparel industry.

2) Develop the Gem & Jewelry industry, and make Colombo a ‘Gem Center’.

3) Establish an Oil Refining Center in Trincomalee and add storage capacity.

4) Increase Pharmaceutical manufacture for export.

5) Re-orient the Industrial structure to include vertical and horizontal integration.

6) Re-organize rural farming on a cooperative basis to be able to sell rice instead of paddy, thereby increasing rural prosperity.

7) Develop rural industry utilizing local raw materials, for export.

8) Establish an institutional framework to develop local innovators.

9) Bring back Development banking with adequate Capital.

10) Develop a short term plan, that would be able to get at least some of the above going.

If we are able to get even some of the above listed going, it should be able to bring about $10 Billion income a year. It would therefore, be much easier to seek funds for investment rather than for consumption. If a viable plan is presented, it would prove that Sri Lanka is determined to come out of the situation we are in. However, there has to be complete commitment towards such an effort and rent seekers completely eliminated from the process for it to generate confidence.

The major project listed above is the development of the Trinco oil facility, which should have been done at the time of independence, but never was. This single project if it was developed in the past would have been sufficient to meet all the foreign exchange needs of the country. Today, it is still not too late, if done properly. The best possible option, if we are unable to do it by ourselves, would be to do it on the basis of a joint venture with India, as refinery costs today could be in the region of $3-5 Billion. The shortest time a refinery had been established in the world is one year, in South Korea.

This project could be started in Trinco by utilizing the funds that’s to be used to expand the present refinery at Sapugaskanda. A 50/50 joint venture would require around $1.5 Billion from each side and additional for the expansion of the storage facility.

The Gem project, to make Colombo the Gem Center, if done properly could easily enhance the present earnings of $500 Million to at least $5 Billion. The Thai exports of Gems are around $18-20 Billion/year. It is no secret that quite a bit of those Gem Stones are of Sri Lankan origin.

The biggest obstacle

The invisible obstacle that not only Sri Lanka, but all developing countries face is something that is unseen, but very much a spoke in the wheel of development.

Most of the so called economists that are around are those that have studied orthodox mainstream economics who believe in ‘the magic of the market’ and the ‘invisible hand’. They do not believe that markets do fail and that market forces do not always work for the best and that left to themselves finance does not seek development.

Therefore, it is quite clear that there should be a certain amount of intervention and direction towards development. Economists, who are able to understand this are very few.

It is only now that the western universities are teaching a more plural economics curriculum and would therefore take some time before students break away from those orthodox economic ‘myths’ and failed neo-liberalism, to come around. The Japanese and Koreans understood this long ago.

How these economists become an obstacle is because due to their loyalty to what they were taught and are following, many other options and tools which could have been used are considered taboo and therefore, unused. Though it has been proved that the orthodox theory was wrong and those taboos were not warranted, mainstream economics has not come round to face reality.

Those who broke away from the orthodox mainstream have succeeded, while the others are still struggling.

It was Mark Twain who once said “It ain’t what you know that gets you into trouble. It’s what you know for sure, that just ain’t so”.

Sunil Abhayawardhane was CEO of Sri Lanka’s largest heavy construction company, CDE, which had successfully completed many major projects before the onslaught from foreign contractors. Was constantly showing the governments in the 80’s and 90’s that the policy towards foreign contractors would end up with an unsustainable foreign debt. He is a social activist and student of macroeconomics seeking ‘out of the box’ solutions, and holds a Master’s degree from the University of Wales in Business Administration. He is presently working on his Phd.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


Responding to our energy addiction



by Ranil Senanayake

Sri Lanka today is in the throes of addiction withdrawal. Reliant on fossil fuels to maintain the economy and basic living comforts, the sudden withdrawal of oil, coal and gas deliveries has exposed the weakness and the danger of this path of ‘development’ driven by fossil energy. This was a result of some poorly educated aspirants to political power who became dazzled by the advancement of western industrial technology and equated it with ‘Development’. They continue with this blind faith even today.

Thus, on December 20th 1979, an official communiqué was issued by the Government and displayed in the nation’s newspapers stating, “No oil means no development, and less oil, less development. It is oil that keeps the wheels of development moving”. This defined with clarity what was to be considered development by the policy-makers of that time. This fateful decision cast a deadly policy framework for the nation. The energy source that was to drive the national economy would be fossil-based. Even today, that same policy framework and its adherents continue. Everything, from electricity to cooking fuel, was based on fossil energy.

The economics of development, allows externalizing all the negative effects of ‘development’ into the environment, this being justified because, “industrialisation alleviates poverty”. The argument, is that economies need to industrialise in order to reduce poverty; but industrialisation leads to ‘unavoidable emissions. Statements like, ‘reduction in poverty leads to an increase in emissions’ is often trotted out as dogma. Tragically, these views preclude a vision of development based on high tech, non-fossil fuel driven, low consumptive lifestyles. Indeed, one indicator of current ‘development’ is the per capita consumption of power, without addressing the source of that power.

A nation dependent on fossil fuel is very much like an addict dependent on drugs. The demand is small, at first, but grows swiftly, until all available resources are given. In the end, when there is nothing else left to pawn, even the future of their children will be pawned and finally the children themselves! Today, with power cuts and fuel shortages, the pain of addiction begins to manifest.

The creation of desire

This perspective of ‘development’, the extension of so-called ‘civilised living’ is not new to us in Sri Lanka, Farrer, writing in 1920, had this to say when visiting Colombo:

“Modern, indeed, is all this, civilised and refined to a notable degree. All the resources of modern culture are thick about you, and you feel that the world was only born yesterday, so far as right-thinking people are concerned.

And, up and down in the shade of glare, runs furiously the unresting tide of life. The main street is walled in by high, barrack like structures, fiercely western in the heart of the holy East, and the big hotels upon its frontage extend their uncompromising European facades. Within them there is a perpetual twilight, and meek puss-faced Sinhalese take perpetually the drink orders of prosperous planters and white-whiskered old fat gentlemen in sun hats lined with green. At night these places are visible realisation of earthly pleasure to the poor toiling souls from the farthest lonely heights of the mountains and the jungle.” The process goes on still …

Develop we must, but cautiously – with the full awareness of the long-term consequences of each process. Development must be determined by empowering the fundamental rights of the people and of the future generations. Clean air, clean water, access to food and freedom from intoxication, are some of these fundamental rights. Any process that claims to be part of a development process must address these, among other social and legal fundamental rights.

One problem has been that, the movement of a country with traditional non-consumptive values, into a consumerist society based on fossil energy tends to erode these values rapidly. Often, we are told that this is a necessary prerequisite to become a ‘developed country’, but this need not be so. We need to address that fundamental flaw stated in 1979. We need to wean ourselves away from the hydrocarbon-based economy to a carbohydrate-based economy. Which means moving from a fossil fuel-based economy to a renewable energy-based economy.

Fossil Fuels or fossil hydrocarbons are the repository of excess carbon dioxide that is constantly being injected into the atmosphere by volcanic action for over the last 200 million years. Hydrocarbons are substances that were created to lock up that excess Carbon Dioxide, sustaining the stable, Oxygen rich atmosphere we enjoy today. Burning this fossil stock of hydrocarbons is the principal driver of modern society as well as climate change. It is now very clear that the stability of planetary climate cycles is in jeopardy and a very large contributory factor to this crisis are the profligate activities of modern human society.

As a response to the growing public concern that fossil fuels are destroying our future, the fossil industry developed a ‘placating’ strategy. Plant a tree, they say, the tree will absorb the carbon we emit and take it out of the atmosphere, through this action we become Carbon neutral. When one considers that the Carbon which lay dormant for 200 million years was put into the atmosphere today, can never be locked up for an equal amount of time by planting a tree. A tree can hold the Carbon for 500 years at best and when it dies its Carbon will be released into the atmosphere again as Carbon Dioxide.

Carbon Dioxide is extracted from the atmosphere by plants and converted into a solid form through the action of photosynthesis. Photosynthetic biomass performs the act of primary production, the initial step in the manifestation of life. This material has the ability to increase in mass by the absorption of solar or other electromagnetic radiation, while releasing oxygen and water vapor into the atmosphere. It is only photosynthetic biomass that powers carbon sequestration, carbohydrate production, oxygen generation and water transformation, i.e., all actions essential for the sustainability of the life support system of the planet.

Yet currently, it is only one product of this photosynthetic biomass, sequestered carbon, usually represented by wood/timber, that is recognized as having commercial value in the market for mitigating climate change. The ephemeral part, the leaves, are generally ignored, yet the photosynthetic biomass in terrestrial ecosystems are largely composed of leaves, this component needs a value placed on it for its critical ‘environmental services’

With growth in photosynthetic biomass, we will see more Oxygen, Carbon sequestering and water cleansing, throughout the planet. As much of the biomass to be gained is in degraded ecosystems around the planet and as these areas are also home to the world’s rural poor, these degraded ecosystems have great growth potential for generating photosynthetic biomass of high value. If the restoration of these degraded ecosystems to achieve optimal photosynthetic biomass cover becomes a global goal, the amazing magic of photosynthesis could indeed help change our current dire course, create a new paradigm of growth and make the planet more benign for our children.

Instead of flogging the dead horse of fossil energy-based growth as ‘Economic Development’, instead of getting the population addicted to fossil energy, will we have the commonsense to appreciate the value of photosynthetic biomass and encourage businesses that obtain value for the nations Primary Ecosystem Services (PES)? The realization of which, will enrich not only our rural population but rural people the world over!

Continue Reading


Australia-Sri Lanka project in the news…Down Under



The McNaMarr Project is the collaboration between Australian vocalist and blues guitarist, John McNamara, and Andrea Marr, who is a Sri Lankan-born blues and soul singer, songwriter and vocal coach.

Her family migrated to Australia when she was 14 and, today, Andrea is big news, Down Under.

For the record, Andrea has represented Australia, at the International Blues Challenge, in Memphis, Tennessee, three times, while John McNamara has also been there twice, representing Australia.

Between them, they have 10 albums and multiple Australian Blues awards.

Their second album, ‘Run With Me,’ as The McNaMarr Project, now available on all platforms, worldwide, has gone to No. 1 on the Australian Blues and Roots Sirplay charts, and No. 12 on the UK Blues charts.

Their debut album, ‘Holla And Moan,’ released in 2019, charted in Australia and the US Blues and Soul charts and received rave reviews from around the world.

Many referred to their style as “the true sound of soulful blues.”

= The Rocker (UK): “They’ve made a glorious album of blues-based soul. And when I say glorious, I really mean it. I’ve tried to pick out highlights, but as it’s one of the records of this year – 2019 – (or any other for that matter) it’s tricky. You have to own this.”

= Reflections in Blue (USA): “Ten original tunes that absolutely nail the sound and spirit of Memphis soul. Marr has been compared to Betty Lavette and Tina Turner and with good reason. She delivers vocals with power and soul and has a compelling stage presence. McNamara’s vocals are reminiscent of the likes of Sam & Dave or even Otis Redding. This is quality work that would be every bit as well received, in the late 1950s, as it is today. It is truly timeless.”

= La Hora Del Blues (Spain): “Andrea Marr’s voice gives us the same feeling as artistes, like Betty Lavette, Tina Turner or Sharon Jones, perfectly supported by John McNamara’s work, on vocals and guitar…in short words, GREAT!”

Yes, John McNamara has been described as an exceptional vocalist, guitarist and songwriter, whose voice has been compared to the late great Sam Cooke and Otis Redding, while Andrea Marr often gets compared to the likes of Tina Turner, Gladys Knight and Sharon Jones.

Continue Reading


Manju Robinson’s scene…



Entertainer and frontline singer, Manju Robinson, is back, after performing at a leading tourist resort, in the Maldives, entertaining guests from many parts of the world, especially from Russia, Kazakhstan, Germany, Poland…and Maldivians, as well.

His playlist is made up of the golden oldies and the modern sounds, but done in different styles and versions.

While preparing for his next foreign assignment…in the Maldives again, and also Dubai, Manju says he has plans to do his thing in Colombo.

Manju has performed with several local bands, including 3Sixty, Shiksha (Derena Dreamstar band), Naaada, Eminents, Yaathra, Robinson Brothers, Odyssey, Hard Black and Mark.

He was the winner – Best Vocalist and the Best Duo performer – at the Battle of the Bands competition, in 2014, held at the Galadari Hotel.

In 2012, he won the LION’s International Best Vocalist 2012 award.

Continue Reading