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Is debt necessary evil ?

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A look at global debt statistics would show that almost all countries, irrespective of their economic status, obtain loans. The USA, the second richest country on the basis of PPP index, has a debt burden of more than 100% of their GDP, which is much more than some of the developing countries such as Brunei (1.7%) and Congo (12%). Russia, a developed country, has a debt/GDP ratio of 17% only. How much debt a country could take would of course depend on its ability to pay back. When the interest rate payable on the loans is lower than the growth rate of the national product, it is considered safe to be in debt. The interest/growth ratio in developed countries is maintained around 1, which is said to be safe with no fear of default. Donors too like to deal with countries that adhere to these parameters.

Obviously, poor countries have to take loans to engage in development work. But why would a rich country like the USA take massive loans. The US has debts amounting to 30 trillion which is 110% of its GDP. From year 2000 to 2019, the US debt increased by 69%. Japan and China are among the main lenders to the US, which owes Japan USD 1.2 trillion and China USD 1.1 trillion, and it has borrowed large sums from countries like Taiwan, Brazil, Belgium, etc. The US could settle these debts or take steps to reduce it, but it prefers to have deficit budgets and meet the deficit with loans. It does that because it can afford to, but there are American economists who say the heavy debt burden could cause a crisis.

If that is the case for the USA, obviously poor countries like Sri Lanka cannot afford to run debts in the range of USD 50 Billion. Our export earnings in 2018 amounted to USD 20 billion and imports cost USD 26 billion. The deficit had to be bridged with foreign loans. Even under crisis conditions we are spending more than we earn. In 2021, export earnings were USD 14 billion while imports cost USD 21 billion.

During the last decade or so interest rates for foreign debt was fairly low, and many developing countries made use of the opportunity to borrow heavily. This money, in many instances, was not utilised judiciously but spent on unproductive projects. As a result, those countries owe record amounts of money to foreign investors, governments and other lenders. For instance, Afghanistan, Chad, Bolivia and Zimbabwe owe an astounding USD 2.1 trillion. As many as 154 countries are in economic difficulty due to such short-sighted policies. Sri Lanka also belongs in this group. Tanzania, Lebanon and Belarus are almost bankrupt. Argentina has defaulted to pay its loans for the ninth time. Covid-19 has made matters worse as it has badly affected the dollar earning capacity of these countries. Sri Lanka in trying to solve the problem in 2020 took steps, such as tax cuts, fertilizer import ban etc. that made matters worse.

For the poorest countries (all those eligible for support from the International Development Association or IDA), 2020 debt service is about $36 billion, divided in roughly equal proportions between multilateral, bilateral (mostly non-Paris Club), and commercial creditors. Sri Lanka does not qualify for IDA assistance. There are worse- off countries than Sri Lanka, some consolation!

All developing country regions are potentially seriously affected: Latin America has the highest debt service/exports ratio, Africa has the least diversified export mix, East Asia has the largest absolute amount of debt service. In normal circumstances, these amounts would simply be refinanced in global capital markets or offset by new disbursements from existing lenders. But circumstances are not normal. Credit markets have tightened, and many countries are faced with very large reductions in foreign exchange revenues. In the face of huge global economic uncertainty, it is hard to predict which countries and regions will be most vulnerable. Already, Venezuela, Argentina, and Lebanon have defaulted and face lengthy and damaging legal proceedings with each creditor trying to negotiate individually, resulting in dead-weight losses for everyone until the situation is sorted out.

One indication that the problem is widespread is that already 90 countries have approached the IMF to access emergency financing. It seems clear that this is not just a low-income or Sri Lankan or an African country problem. There are several calls for debt standstills to ease the burden on developing countries. Debt threatens to create a global development emergency, in much the same way as the pandemic is creating a global health emergency. Both could result in social unrest and instability. Something will have to be done by the aid giving countries, but that doesn’t mean the responsibility of developing countries are less. They have to show greater commitment in controlling corruption, waste and in good management and transparency and accountability in all their dealings. Loans should not be wasted on unproductive projects such as Mattala Airport.

All these countries need time to recover. Many developing countries simply will not have the foreign exchange to service their debt this year, notably those who are heavily indebted, are commodity dependent (two-thirds of all developing countries according to UNCTAD), have relied on large tourism earnings, or on remittances. A good example of the value of buying time is the negotiated settlement of debts in Korea in 1997-98. Similarly, Sri Lanka and all the affected countries need time to put their house in order and slowly grind back to recovery.

In the current context, timeliness means that case-by-case solutions may not be feasible. Like COVID-19, there is a need to flatten the curve of debt reschedulings, so that the peak falls within the capacity of the country to handle the crisis. Hence there is a need for the G-20, the IMF/World Bank, the U.N. or others to develop a simple debt freeze framework, that can buy time for these stricken countries. Then the problem in each country could be analyzed and remedial action suitable for each country taken. There could be a UN Security Council Resolution calling for a standstill on payment of debt service and an agreement by all creditors to abide by the UN resolution. Such measures had been taken in the past during global debt crises.

Sri Lanka is somewhat better off than most of these badly affected countries. It is a fertile country with a good base for agricultural development. Its literacy rate is high and has an educated workforce. Its garment and tourism industries are fairly well-developed, and the potential for development of industries like electronics, IT and communication is fairly good. The geographical situation of Sri Lanka in the Indian Ocean is most favourable for the development of a trade and shipping hub. If our leaders stop doing foolish things, listen to genuine scientists and economists and focus on supplying the agriculturists, planters, fishers and industrialists their requirements to develop their sectors, the country has a good chance of recovery. Our economists, managers, CEOs and entrepreneurs are second to none in the world. If there is no political interference they have the knowledge and ability to deliver.

In the energy sector, the mafia that controls it must be got rid of, and solar energy must receive highest priority. More than half of our foreign exchange earnings go for import of fuel. The sun is the only source of energy the world has, the problem is we have not tapped its resources fully. Sri Lanka must seriously go into the business of researching and manufacturing solar power capturing equipment. These things could and should have been done with the big loans that the country took in the past.

In future, loans must be kept below 50% of the GDP and the ratio between interest rate payable on loans and GDP growth rate should be maintained at one or less. The present debt burden of USD 50 B should gradually be reduced to about 10 B. Loans should never be taken for consumption or unsustainable projects that do not benefit the people. No room should be left for corruption. Therefore, corrupt politicians would not like to adopt these policies. First we must elect incorruptible politicians.

N.A.de S. AMARATUNGA



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Opinion

Religious and philosophical aspects of Buddhism

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By Dr. Justice Chandradasa Nanayakkara

Buddhism first originated in India in the 6th century BC. Today, Buddhism has become one of the most popular religions with over 507 million followers worldwide. It is a non-theistic religion, as it does not believe in a creator or God.

Some prefer to call it a religion, while others call it a philosophy, still others regard it as both a religion and philosophy, as it contains many characteristics which blur the lines between philosophy and religion. Different people view buddhism differently. Therefore, the question of whether Buddhism is a philosophy or a religion depends on how people define religion and its technicalities. Religion generally connotes idea of presence of powerful God who controls the entire world, Buddhism which is non-theistic cannot be classified as a religion. Term non-theistic religion would be a contradiction in terms.

Of course, it has to be admitted that there are plenty of religious and philosophical aspects to the Buddha’s doctrine.

Buddhism was founded by Siddhartha Gautama the Buddha. He was born to a royal family in Kapilavastu, on the foot hills of the Himalaya in the 16th century B.C. When he was overcome by sights of disease, old age and death he realised that the world was full of suffering and misery and therefore renounced his worldly life in search of true happiness. After practicing great austerities, and going through intense meditation with a strong will and a mind free from all disturbing thoughts and passions, he attained enlightment.

The Buddha can also be regarded as one of the greatest psychotherapists the world has ever produced.

Buddhism is a pragmatic teaching, which starts from certain fundamental propositions about how we experience the world and how we act in it. It teaches that it is possible to transcend this sorrowful world and shows us the way of liberating ourselves from the sorrowful state.

Buddhism is not culture bound, nor bound to any particular society, race or ethnic group unlike certain religions that are culture bound. Buddhism believes in pragmatism and its practicality can be seen as one of its distinguishing features. Buddhism lays special emphasis on practice and realisation.

In a way Buddhism can be considered as a way of life. It is the righteous way of life which brings about peace and happiness to every living being. It is a method of ridding ourselves of miseries and to find liberation from samsaric cyclic life.

The teachings of the Buddha contain practical wisdom that is not limited to theory or to philosophy. Philosophy deals mainly with knowledge and it is not concerned with translating that knowledge into day to day practice. Philosophy is commonly defined as a rational investigation of principles and beliefs of knowledge and conduct. Philosophy can see the frustrations and disappointments of life but unlike in Buddhism it does not show any practical solution to overcome those problems which are part of the unsatisfactory nature of life.

The Buddha’s teachings are referred to as the Dhamma, which literally means “the ultimate truth” or the “truth about reality”. Buddhists are expected to live by it. The Buddha always encouraged his followers to investigate his teachings for themselves. His Dhamma is described as Ehipassikko which roughly means “Inviting his followers to come and see for themselves or “verify” or “to investigate”. He strongly encouraged his followers to engage in critical thinking and draw on their own personal experience to test what he was saying. This attitude differs entirely from other regions such as Christianity where followers are encouraged to accept its scriptures unquestioningly. This is exemplified by the Kalama Sutra.

When the Buddha on his wanderings arrived at Kesaputta, the town of the Kalamas’, the Kalamas went to the Buddha and said to the Buddha “Lord, there are some brahmans and ascetics who had come to Kesputta. They expound and glorify their own doctrines but as for the doctrines of others, they deprecate them, revile them show contempt for them and disparage them. Then again other brahmans and ascetics come to Kesputta they too expound and glorify their own doctrines, but as for the doctrines of others they deprecate them, revile them show contempt for them and disparage them. They leave us absolutely uncertain and in doubt. Which of these venerable brahmanas and ascetics are speaking the truth, and which ones are lying?”

Lord Buddha replying said “Yes, O Kalama’s, it is right for you to doubt, it is right for you to waver. In a doubtful matter, wavering has arisen.” And gave them the following advice. “Come, O Kalamas, do not accept anything on mere hearsay. Do not accept any thing by mere tradition thinking that it has been handed through many generations. Do not accept anything on account of rumors without investigations. Do not accept anything just because it accords with your scriptures. Do not accept anything by mere supposition. Do not accept anything by mere inference. Do not accept anything by merely considering the appearances. Do not accept anything merely because it agrees with your preconceived notions. Do not accept anything merely because it seems acceptable. Do not accept anything thinking that the master is respected or it is part of tradition”.

“But when you know for yourselves after investigation that these things are good, these things are not blameless, these things are praised by the wise, undertaken and observed, these things lead to the benefit and happiness, enter on and abide in them”

These wise utterances of the Buddha made more than 2500 years ago, still holds good and can be applied with equal force to our day to today life. In Janasara-sammuccaya he repeats the same counsel in different form. “tapac chedac canikasatsvarnamiva panditaih Parrikshya blikshavo grahyam madvaco na tu gaurvat” which means “As the wise test gold by burning, cutting and rubbing it on a piece of touchstone, so are you to accept my words after examining them and merely out of regard for me”.

The Buddha dealt with the problem of human suffering and approached it in a concrete way. This attitude of pragmatism of Buddhism is clearly evident from the Culamalukyasutta in which the Buddha made use of the example of the wounded man. A man wounded by an arrow wished to know who shot the arrow, from which direction it was shot, the material with which it was made, before it was removed from his body. This man is compared to a man who would like to know about the origin of the Universe, whether the world is eternal or not, finite or not before he practices the religion.

Just as the man in the parable will die before he has all the answers he wanted regarding the origin and the nature of the arrow, such people will die before they will ever have the answers to all their irrelevant questions. This Sutra exemplifies the practical attitude to Buddhism and question of priorities.

Buddha as a primarily ethical teacher and reformer discouraged metaphysical discussions devoid of ethical value and practical utility. Instead, he enlightened his followers on the most important questions of sorrow, its origin, its cessation and the path leading to its cessation, as adumbrated in the Four Noble Truths. To him the problem of human suffering was much more important than speculative discussions or reasoning.

Most people define religion as believing in some kind of omnipotent God or Creator, the view to which buddhism does not subscribe. Buddhism is not a religion based on faith, authority, dogmas or revelation, but based on facts as we experience them in our daily lives. Buddha declared “whether a tathagata (buddha) arises in the world or not all conditioned things are transient” Annica, unsatisfactory Dukkha and soulless Annatta. Buddha declared deliverance could be attained independent of any external agency such as a God or a savior. This is one of the fundamental differences which distinguish buddhism from other religions.

In the Dhammapada the Buddha says: “By oneself alone is evil done: by oneself is one defiled. By oneself alone is evil avoided: by oneself alone is one purified. (Purity and impurity depend on oneself. No one can purify another). A Buddhist does not think that he can gain purity or salvation merely by seeking refuge in the Buddha or by mere faith in him. Buddha as a teacher may be instrumental or show the path of purification to a person but he himself has to strive.

Although the Buddha discounted the concept of God he never denounced or denigrated it. Never in all his discourses did the buddha make a direct attack on the concept of God

Most people across the world consider buddhism as a religion. But it should be admitted that Buddhism has many religious and philosophical aspects in its doctrine, which has led many people to regard it so. Further, Buddhism also contains metaphysical aspects which are associated with religion. Similarly, discourses on rebirth and different realms of existence, in which a person can be reborn after his death are associated with religion. Moreover, reference to supernatural powers in many of Buddhist discourses and Karmic consequences which result from one’s actions makes it less of philosophy and more of religion

Further, he speaks of the law of karma which he uses to expound the unfairness and inequality that exits in society, the defilements, fetters and hindrances such as attachment, sensory desires, lust doubt and uncertainty and craving which prevents one from attaining liberation from samsaric life. All of the above go to prove the religious aspects of the doctrine. The five precepts by buddha are more like a set of guidelines people should follow for a good life on this and the next life.

Therefore, debate whether Buddhism is a religion or a philosophy is legitimate has both sides have reasonable argument to buttress their stand on the matter.

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Opinion

Dr. Mrs Malwattage Josephine Sarojini Perera

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An embodiment of elegance, dedication, compassion and love

A tribute

It is just three years on the 6th of December 2022, since you left this mortal world and were taken by a posse of God’s angels to your heavenly abode. That occurrence submerged all of us, in your immediate and extended family, as well as all your friends and your patients, in the intolerable gloom left by a dazzling light being extinguished forever. Even in death, you had that radiant smile that you were renowned for, the one which warmed the cockles of all our hearts, day in and day out.

The lady was always like the lovely moon that brings light to the darkest night. Indeed, for all of us her loved ones, she was like no other woman that you are ever likely to meet. In her life on planet earth, she had the temperament of a celestial being, together with the marvellous spirit of a very gentle and gorgeous member of humanity. She was also the absolute embodiment of what it was like to be a lady of uninhibited grandeur. To have and to hold a woman like that, one had to be tremendously lucky; in return, one simply had to try ever so hard to treat her like the precious treasure she was.

Her heart was as soft as the wings of a butterfly and it beat ever so serenely in a way in which she would try her best to give even the world to her loved ones. She has occasionally been through moments gloomier than midnight but she always, and ever so quickly too, came out of them, to end up that much stronger, richer in spirit, and even more resilient than ever before. Her only weakness was that she cared so much for others. In everything she did, she hardly ever, if not never, put herself first. One of the kindest of souls that walked the earth, she was ever ready to forgive even some lapses on the part of those around her and the people she loved.

In her chosen vocation in healthcare, in a career spanning 45 years, which involved operative surgery, paediatrics, out-patient stints, blood bank work, rheumatology, sexually transmitted diseases, and finally working with those afflicted and affected by HIV/AIDS, she was just like a beacon of hope and succour to a flock of suffering mankind, who had the good fortune to come under her empathetic radar. Sitting and watching her dealing with a woman who had caught HIV through no fault on the part of the patient, was an abject lesson in medical professionalism. Sarojini did her very best for her patients, even more than anybody could ever have asked for. She would go even further than that legendary extra mile for them, as much as she did for those who needed her attention and care, and for those whom she loved in this world. I consider myself to have been ever so fortunate to have been one on whom her love was showered; in abundance at that.

The Good Lord above, in his perpetual wisdom, had elected to spare her the ravages of the COVID-19 pandemic and the current economic crisis by taking her into his bosom in 2019. Yet for all that, if she was with us, she most certainly would have been in her element and would have taken all those problems in her stride. She would have given her all to those suffering in the pandemic and the economic crisis. That would have been her response; one that anyone could have counted on, and one which would have been implemented with no strings attached.

I knew her for over half a century, from the time she entered the Faculty of Medicine, Colombo in my immediate junior batch and for 44 years 7 months and 11 days I had been tied to her with the golden thread of wedlock. Those were most definitely the happiest days of my existence. The rewards were unbelievable. She was the absolute epitome of a model wife and a splendid mother.

We do uncontrollably grieve at our loss, day in and day out. Our tears of desolation see no bounds whatsoever. However, we also try ever so hard, to take solace in the immortal words of Her Majesty, the late Queen Elizabeth the second “Grief is the price we pay for love.” In Sarojini, even in our worst hours of despair, we remember the sterling and fabulous memories of a unique woman for whom the word ‘love’ was ever so special. She was indeed the pure essence of love.

I am quite certain that if my late wife Dr Sarojini Perera was to reply to our lamentations, the following would be her characteristic, abiding and natural response.

So……, live your life

As I sit in heaven and watch you every day,

I try to let you know with signs, that I never went away.

I hear you laughing, and watch you as you sleep,

I even place my arms around you, to calm you as you weep.

I see you wish the days away, longing to have me home,

So, I send you signs, so you know that you are not alone.

Do not feel guilty, that you have a life, that was denied to me,

Heaven is truly beautiful, just wait and see.

So……, live your life, laugh again; enjoy yourself, be free,

Then I know, that with every breath you take, you will be taking one for me as well.

We try ever so hard to console ourselves with the words of the religion that we believe in, as written in Isaiah 57:1 “The righteous pass away; the godly often die before their time. No one seems to understand that God is protecting them from the evil to come”. We earnestly believe that she was taken to heaven, way before her time, just to fulfil that axiom.

Rest in everlasting peace in your spiritual dwelling my beautiful angel, till we meet again in heaven. You may have left us three years ago, but you will never ever be forgotten. Darling Sara, even though we are going through the unbearable agony of missing you in person, we treasure the wonderful memories of you, which will continue to resonate and live in our hearts, forever more.

by Dr B. J. C. Perera
On behalf of the family

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Opinion

Power tariff hikes and need to revamp CEB

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By Ordinary citizen

Ceylon Electricity Board (CEB) has again requested for an increase of 70% in electricity tariffs to settle its past losses. What are these losses and how can the CEB be run as a profit-making Institution? Recently, the Chairman of Public Utilities Commission (PUCSL) has claimed that the CEB had a net profit of Rs. 1 billion last month owing to the increase in rates a few months ago. Is it fair to burden an already economically oppressed public with a 70% increase in rates? While the CEB is making these unfair claims, the minister is silent on solving the problem which is the CEB itself. He even claimed that half the employees of CEB are redundant and what has he done to remedy this situation? CEB and Ceypetco are the biggest loss-making state-owned enterprises (SOE). In spite of losses they continue to pay bonuses and huge salary increases to its employees. They get a 25% salary increase every three years and recently CEB paid Rs. 3679 million to its employees under various ruses. In spite of that CEB employees recently demanded a 36% salary increase and the management has agreed to pay the usual 25% increase and this is at a cost of Rs. 9 billion! A meter reader in the CEB gets a salary of Rs. 120,000, about twice paid to a graduate teacher. General Manager of CEB gets a salary of Rs. 655,310 and a Grade 1 engineer gets a monthly salary of 533, 895 according to their own circulars. In addition, they get additional remuneration for site inspection, overtime, fuel allowance, telephone bill reimbursement etc.

These disproportionate salaries have arisen owing to the high handedness of the Board of Management which has taken decisions against court orders, cabinet decisions and Management services decisions. Since the whole country is dependent on the electricity supply, all Governments in the past have conveniently sidestepped confronting the CEB employees and given all what they ask for.

The Auditor General has pointed out that CEB has paid 1712 million in 2018 and 1873 million in 2019 going against cabinet decisions made in 2007 and Management services circular of 2009. In 2014, CEB Board proposed a 100% salary increase to only Engineers (circular no. 2014/GM/46/Pers dated 27 November 2014 and according to a Court decision (CA/WRIT/193/2015) this circular is illegal, null and void and any payments based on this circular is illegal. However, flexing its muscle, CEB granted a 85% of the salary as an allowance to engineers through Presidential decision on the advice of the attorney general which tantamount to contempt of court. Our politicians have been intimidated with the threat of strikes so as to cripple the entire country and they have no spine to oppose such exorbitant salaries and allowances of CEB employees. They have openly flouted the Government rule that limits all allowances to a maximum of 65%. If we consider other allowances on top of this 85% salary it comes to a whopping 138% of the basic salary! Furthermore, even the PAYE tax of its employees is paid by the CEB in clear violation of the Inland Revenue Act which specifically says that the income tax of an employee has to be paid by the individual and not the employer. These matters have been questioned by the COPE on several occasions but no corrective actions have been taken.

This reminds me of the courage Singapore’s Lee Kuan Yew had in dealing with a work to rule campaign of the Singapore airline pilots union in 1980. He summoned the pilot’s union representatives and gave them a choice. In his legendary remarks, he told them, “If you continue this I will by every means at my disposal teach you and get the people of Singapore to help me to teach you a lesson you won’t forget. And I’m prepared to start all over again or stop it,” Lee said. He further said, “They know that I’m prepared to ground the airline. They know that I can get the airline going again without them. And let there be no mistakes about it. Whoever governs Singapore must have that iron in him. Or give it up. This is not a game of cards. This is your life and mine. I spent a whole lifetime building this. And as long as I’m in charge, nobody’s going to knock it down.” And with that, the matter with the Pilots union was resolved. We do not have leaders of Lee Kuan Yew’s calibre and put the country first leaving aside politics. They meekly surrender to unfair demands of strong unions such as those of the CEB who hold the whole country to ransom with strike actions.

Other actions of the CEB have contributed to the losses incurred by the CEB. They have continuously scuttled cheaper energy options such as solar and buy power from private power plants at exorbitant rates. The powerful Engineers union has blocked new power generating projects such as the 300 MW LNG plant Sobodhanavi. According to them it is cheaper to purchase emergency power from private power plants which is far from the truth. Also, some of these plants could have been absorbed by the CEB through the initial agreement, yet they continue to pay not only the unit cost but also their investment expenditure. CEB has procrastinated actions on at least eleven low cost renewable energy projects in the Long Term Generation Expansion Plan (LCLTGEP) for reasons best known to them and although former President Gotabhaya in his election manifesto promised to get 70% of our energy from renewable sources, the high handed CEB Engineers: union has continuously opposed the implementation of any of the renewable energy projects. Some examples are the 100 MW solar projects at Siyambalanduwa and Pooneryn and the 100 MW wind power project at Pooneryn.

It is grossly unfair to burden ordinary consumers with high electricity tariffs when a complete overhaul of the CEB is what is needed. If the engineers’ union completely blocks such low-cost projects, it is better to go for a 100% privatisation of the CEB, which appears to be the only solution. No politician either present or past have the courage to face the unfair practices at the CEB and this requires the action of the Government at the highest levels and the parliament should debate this crucial issue in parliament and come out with a long-term strategy to provide for our energy needs. Our President appears tough on hapless student leaders and what actions he proposes to take against them. However, he has been silent on this crucial issue while the treasury is pumping around Rs. 500 billion annually to sustain the corrupt CEB and this amount has not even been included in his budget speech. No wonder why we are in such a precarious position where our economy is crumbling.

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