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Import restrictions, wedgie and reality



Monday 13th September, 2021

Nobody has taken kindly to the stringent import restrictions the Central Bank (CB) has imposed, however necessary they may be to shore up the country’s depleting foreign exchange reserves. From the reactions of various people to the government move to restrict imports, one can guess how they prioritise their needs and wants. Most of them are worried about possible shortages of domestic appliances, food items, beverages, skincare products and the like. Their concerns and consternation are understandable. But, curiously, what worries the Opposition is the restriction on underwear imports, of all things!

It is said that the ordinary Sri Lankans think with their stomachs, especially when they vote. In commenting on the 100% cash margin deposit slapped by the CB, the focus of many Opposition worthies has been on a possible shortage of imported underwear; this kind of reaction shows the Opposition MPs’ preoccupation with their nether regions more than anything else—a fact that has become evident from their lewd utterances in Parliament. They have been flogging the underwear issue to the point of queasiness during the past couple of days. The Opposition is bent on getting its back on the government politically, and this may be the reason why it has sought to give the latter a wedgie, but in so doing it has unfortunately reduced an otherwise very serious economic issue to a mere political joke.

Garments, imported or otherwise, are the least of Sri Lankans’ problems, at present, for two reasons. In April, they bought all the clothes in the world as if they had never seen them before, and they have loads and loads of them in their wardrobes; their irresponsible shopping sprees caused an explosive spread of Covid-19, which has led to a situation where they are confined to their homes and cannot wear what they have bought. On the other hand, enough garments are produced locally, and export quality clothes also enter the local market. So, the Opposition politicians’ worry about a possible shortage of underwear is baseless.

Ironically, the present-day political leaders looked down upon garment factories during their Opposition days about three decades ago. When the late President Ranasinghe Premadasa set up garment factories throughout the country to develop the rural economy and provide employment to the poor, the then SLFP-led Opposition ridiculed his project, claiming that he was having Sri Lankan girls stitch jangis for suddhis (underwear for the white women). The JVP, too, looked down upon the garment factory programme and coined a catchy slogan to denigrate it—kellanta gament, kollanta pament (garment factories for girls and pavement hawking for boys). Today, the Opposition led by the late President Premadasa’s son, Sajith, would have the public believe that Sri Lankans will have to do without underwear due to import restrictions! The worst critics of his father’s project at issue have become dependent on garment factories to earn foreign exchange.

It is expected that the 100% cash margin deposit requirement will help maintain the stability of exchange rates and foreign currency market liquidity as it discourages excessive imports of speculative nature. Most of the commodities on the CB list are non-essentials, and the public can do without some of them, or locally produced alternatives thereto are available. But how can tyres be considered non-essentials; are locally manufactured tyres available to prevent shortages due to import restrictions?

True, the blame for the country’s forex woes should be apportioned to successive governments which borrowed heavily from external sources for projects that have become white elephants. A sizeable chunk of the borrowed funds also ended up in the off-shore accounts of the politicians who have been in power during the past several decades. The former Rajapaksa administration was mainly responsible for borrowing excessively and embarking on useless ventures in the name of development. But there is no gainsaying that the country has to adopt drastic measures to hoist itself from the present economic mire. Import restrictions alone will not do. While importers are discouraged from bringing in non-essential goods, action must be taken to ensure that the country benefits from Sri Lankan exporters’ dollars, and exporters do not misprice their goods to park their dollars overseas to make the most of the rupee depreciation. The practice of stashing away dollars overseas and mispricing have aggravated the country’s current account deficit by depressing the dollar inflows. It is doubtful whether any effective measures have been adopted to prevent exporters from under-invoicing goods to keep their dollars abroad and importers from over-invoicing goods to send their dollars out.

Meanwhile, not all mobile phones can be considered non-essential goods. Most Sri Lankans are dependent on mobile phones to carry out their day-to-day functions. The pandemic has made the mobile phone essential for even children following online lessons. There are also others who purchase the latest editions of mobile phones unnecessarily. Import restrictions, therefore, could have been imposed on mobile phones, if at all, above a certain factory price. The same holds true for domestic appliances such as refrigerators which people cannot do without.

The 100% cash margin deposit requirement will enable big-time businessmen with enough dollars to monopolise the import market by elbowing out others, and fleece consumers. Such a situation has to be averted. Most of all, the need for revising the list of imports affected by the extreme cash margin deposit measure cannot be overemphasised to prevent it from dealing a crippling punch to the average consumer.

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Justitia in tears



Thursday 28th October, 2021

Power befogs governments, and makes them muddle along, impervious to reason. When intoxicated with power, politicians think they cannot be wrong and resort to ill-conceived actions, and box themselves into a corner, in the process. This, we have witnessed under all governments with steamroller majorities.

President Gotabaya Rajapaksa is no stranger to controversy. This time around, he has triggered an avalanche of criticism by appointing General Secretary of the Bodu Bala Sena (BBS) Ven. Galagodaaththe Gnanasara Thera, of all people, as the head of a 13-member Presidential Task Force (PTF) to ‘make a study of the implementation of the concept, One country; One law, and prepare a draft Act for the said purpose’. The PTF is also required to study the draft Acts and amendments prepared by the Ministry of Justice and submit a proposal, we are told.

The other members of the PTF are Prof. Dayananda Banda, Prof. Shanthinandana Wijesinghe, Prof. Sumedha Siriwardana, N.G. Sujeewa Panditharathna, Attorney-at-Law Iresh Senevirathne, Attorney-at-Law Sanjaya Marambe, Eranda Navarathna, Pani Wewala, Moulavi Mohamed, Mohamed Inthikab, Kaleel Rahuman and Azeez Nizardeen. Why hasn’t anyone been appointed to represent the Tamils? There should be members to look after the interests of all communities including the Veddas. The need for an outfit tasked with such a serious task to be inclusive cannot be overemphasised.

It defies comprehension why the President has handpicked as the head of the PTF a person who was granted a presidential pardon while serving a sentence for contempt of court, which in other words means causing an affront to the dignity of the judiciary. How come the President thinks a person sentenced to jail for violating the law is fit to carry out his one-country-one-law project?

Opinion may be divided on what led Gnanasara Thera to commit contempt of court, in 2016, and languish in prison. He has been hailed in some quarters for taking up the cudgels on behalf of some military intelligence personnel, but by no stretch of the imagination could this be cited in extenuation of the offence of disrupting court proceedings. If everyone starts doing so, courts will not be able to function. However, it will be remiss of anyone who is flaying Gnanasara Thera to turn a blind eye to a far worse incident that took place in the Colombo High Court about a decade ago. When the judgment in the White Flag case was delivered on 18 Nov. 2011, a group of lawyers and outsiders went berserk, smashing court furniture and threatening judges; the police had to rush in to protect them. Nobody was prosecuted for that ugly scene, which the Bar Association of Sri Lanka, and all those who are fighting for the independence of the judiciary chose to ignore. However, two wrongs do not make a right.

The idea behind the one-country-one-law programme is to ensure that the law of the land applies to everyone equally. So, a person who has shown disrespect for the law and the judiciary and been jailed for that is ipso facto disqualified from heading the PTF in question. This, however, is not the only reason why the President’s wisdom of making the controversial appointment stands questioned.

Hasn’t anyone in the government read the report put out by the Presidential Commission of Inquiry (PCoI), which probed the Easter Sunday attacks? The PCoI has, in Chapter 22 titled, Contributory Factors, recommended that the Attorney General consider whether criminal proceedings can be instituted against Ven. Gnanasara Thera. It has also recommended that the BBS be proscribed because its actions pose a threat to religious harmony. Observing that ‘some of Gnanasara Thera’s actions and utterances have contributed to Muslim youth taking to extremism and joining Zahran’, the PCoI says: “It was in evidence that Zahran used the speeches and actions of the Thero to rally support for his cause. In the final video made by Zahran spelling out the reasons for the attacks, reference is made to the actions of the Venerable Galagoda Aththe Gnanasara Thero … The actions of Ven. Galagoda Aththe Gnanasara Thero resulted in reciprocal radicalization of Muslim youth.”

Is it that the President has not taken the PCoI findings and recommendations seriously? However, some recommendations have already been carried out. Criminal proceedings have been instituted against former Defence Secretary Hemasiri Fernando and ex-IGP Pujith Jayasundera.

Why weren’t the PCoI recommendations taken into consideration when the aforesaid controversial appointment was made? An explanation is called for.

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Vroom dream!



Wednesday 27th October, 2021

The government is behaving as if it had no problems to contend with. It is now talking about a proposal for the construction of a Formula One racing track, of all things, in Hambantota, of all places, while the country is struggling to replenish its oil supplies.

What has been proposed is a purpose-built circuit, according to media reports. The Cabinet will take up the proposed Formula One project for discussion soon, we are told. Don’t our ministerial worthies have any other important matters to concentrate on? The fertiliser crisis is far from resolved. Farmers are staging street protests and threatening to march on Colombo. Experts are warning of a drastic drop in the national agricultural output. Essential commodities are in short supply, and their prices have gone into the stratosphere. Public health experts have warned of another explosive spread of the pandemic in December and the possibility of another lockdown. The economy is in bad shape. But government politicians are living in cloud cuckoo land, dreaming of racing tracks!

The government should not be in a hurry to discuss the proposed F1 track, for there may not be any need for it. Unless funds are raised for oil imports urgently, or the petroleum prices are jacked up again, ordinary people will not be able to drive or ride, and the existing roads will be so deserted that it may be possible to hold car races on them.

It is said that the proposed F1 track will be a private sector project, which will bring in the much-needed forex, but we will have to wait for future Pandora Paper leaks to see who is really behind those who are said to be willing to invest in the racing track. There is the possibility of a fraction of the funds stolen from Sri Lankans returning to the country as investment. Private sector investors cannot be so naive as to invest in an F1 track in this country. They cannot be unaware how difficult it will be to have races held here, given the difficulties experienced by countries like Singapore, India, etc., with F1 tracks.

If the proposed F1 track is built by any chance, Hambantota will set a world record as the town boasting the highest number of white elephants. It already has an inland port with only a few ships. Hardly any summit has been held at the Hambantota International Conference Hall for years. The Sooriyawewa International Cricket Stadium is deserted, and its only attraction is said to be the bushmeat served in eateries in the neighbouring township. Then there is the Mattala International Airport, where deafening roars are heard more from wild jumbos roaming the area than from jumbo jet engines. Add an F1 track, and we will have a port without ships, an airport without planes and a racing track without cars! (Hambantota has an excellent road network which is almost deserted. Perhaps, the government may be able to use it as an F1 road/street circuit.)

Car racing is one of the main reasons for the collapse of the previous Rajapaksa government, which closed busy roads in Colombo and Kandy for races, and turned a blind eye to late-night drag races, which became a real nuisance to the residents of Colombo. The organisers of the racing events even disregarded protests by the Maha Nayake Theras. The rathagaaya (local slang for excessive desire for driving or racing) of the young members of the ruling family made that administration extremely unpopular.

Let the government be urged to concentrate on pandemic control to prevent lockdowns, take steps to eliminate corruption and make the country attractive as an investment destination by improving its ease-of-doing-business ranking. If the government leaders get their act together, foreign direct investment will flow in. This is what countries like Singapore have done to achieve progress. An F1 circuit has never helped develop a poor country.

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Of that ‘hug in the ring’



Tuesday 26th October, 2021

There is an uneasy truce between the government and the warring teacher-principal trade unions. What looks like a hug in the ring, however, is deceptive; the two parties to the current dispute are actually in a clinch, which they are likely to break from to resume throwing killer hooks at each other, given half a chance.

The government started reopening schools last Thursday, as previously announced, but most of the protesting teachers and principals did not report for work on that day. Instead, they resumed work yesterday. They obviously sought to teach the government a lesson by keeping school attendance extremely low on Thursday and Friday. Whether their action had any impact on the government is doubtful, but students lost two more days of schooling, as a result. Both sides to the conflict would have the public believe that they are trying to safeguard the interests of students, but they are obviously driven by self-interest.

One only hopes that schools will remain open, and the protesting trade unions and the government politicians, most of whom should be sent back to school, will work out a compromise formula. Losses that students and the country have already suffered due to prolonged school closures caused by the pandemic are unprecedented, inestimable, and irrecoverable, and, therefore everything possible must be done to ensure that schools will not be closed owing to a teachers’ strike.

Teachers and principals have warned that they will intensify their trade union action unless their demands are granted. The government has undertaken to solve their salary issues through Budget 2022, to be presented to Parliament next month. The rectification of teachers’ and principals’ salary anomalies is likely to make other categories of state employees resentful. The public sector salary structures are very complex; they are in fact a minefield. A decision is said to have been taken to make teaching a closed service, as a way out, but it is too early to say whether the proposed solution will be acceptable to others.

General Secretary of the Ceylon Teachers Union Joseph Stalin has said teachers will confine themselves to teaching, and will not take part in school cleaning campaigns and other such activities. Teachers and principals carry out various tasks besides teaching for the benefit of their students without expecting or receiving anything in return, and their voluntary work should be appreciated. But, sadly, teaching is exactly what a considerable number of teachers do not do properly. Complaints abound that many teachers and principals neglect their duties; almost all students are dependent on supplementary education to prepare themselves for competitive examinations. The proliferation of private tuition centres throughout the country is an indictment of government teachers. This is something the teachers’ unions which are all out to win their demands ought to take cognisance of. They should ensure that each member of theirs earns his or her keep without being a burden on the taxpaying public.

Meanwhile, the government is sure to print more money to meet the protesting teachers’ and principals’ demands, causing inflation to rise further. An increase in the public sector salary bill, or other state expenses, generally leads to tax hikes. This will be a double whammy for the general public already struggling to make ends meet. But the government will have to fulfil its pledge to teachers if schools are not to be closed again.

No reasonable person will grudge teachers—or any other category of workers, for that matter—better pay, but the latter will have to work harder and help straighten up the education sector which is in decline. The least that the protesting trade unions can do is to make teachers carry out their duties and functions properly to obviate their students’ dependence on shadow education to pass competitive examinations.

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