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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



Opinion

Role of children’s stories in learning English and their impact on children

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Children’s stories have always been an important part of childhood. From traditional fairy tales to modern picture books, stories entertain children while also helping them understand the world around them. When children are learning English as a language, stories become an especially valuable tool because they provide a natural, enjoyable, and meaningful way to develop language skills. Through characters, plots, and imaginative situations, children’s stories support vocabulary development, improve communication abilities, and encourage confidence in using English.

One of the greatest benefits of children’s stories in English language learning is that they introduce children to new vocabulary in a meaningful context. Instead of memorising isolated words from a list, children learn words through situations and actions within a story. For example, a story about a farm may introduce words such as “animal,” “field,” “farmer,” and “plant” while showing how these words relate to each other. This contextual learning helps children understand and remember new vocabulary more effectively.

Stories also improve children’s listening skills. When teachers, parents, or other speakers read stories aloud, children hear correct pronunciation, sentence structures, and natural expressions in English. Regular exposure to spoken English helps children become familiar with the rhythm, sounds, and patterns of the language. Even when children do not understand every word, they can often follow the meaning through pictures, gestures, and the events of the story. Over time, this develops their ability to understand spoken English in different situations.

Another important impact of children’s stories is the development of speaking skills. Stories encourage children to talk about characters, describe events, answer questions, and share their own ideas. Activities such as retelling a story, acting out scenes, or discussing what might happen next give children opportunities to practise English in a relaxed environment. Because stories are enjoyable and engaging, children are often more willing to participate and communicate without fear of making mistakes.

Children’s stories also support the development of grammar skills. Through repeated exposure to well-formed sentences, children gradually recognize how English works. They learn common sentence patterns, verb forms, and ways of expressing ideas. For young learners, grammar is often easier to understand when it is presented through a story rather than through direct explanations. For example, a story that describes past events naturally introduces the use of past tense verbs, allowing children to observe grammar in action.

In addition to language development, stories have a strong influence on children’s imagination and creativity. Stories allow children to enter different worlds, meet interesting characters, and explore new ideas. When learning English, imagination makes the language experience more meaningful. A child who becomes interested in a story about a brave character or a magical adventure is more likely to remember the words and expressions connected with that experience. Creativity also encourages children to create their own stories, which further strengthens their ability to use English.

Children’s stories can also help develop cultural awareness. Language is closely connected with culture, and stories often introduce children to different traditions, lifestyles, and values. English stories from different countries allow children to learn about people and places beyond their own experiences. This helps them understand that English is not only a subject to study but also a way to communicate with people around the world.

Reading stories in English can also increase children’s motivation and positive attitudes toward learning. Many children may find learning a new language challenging, especially when they focus only on textbooks or exercises. Stories make learning more enjoyable because they combine education with entertainment. When children associate English with fun and creativity, they are more likely to develop curiosity and continue learning.

The emotional impact of stories should not be overlooked. Many children’s stories contain themes such as friendship, kindness, courage, and problem-solving. Through characters and situations, children can learn important social and emotional lessons. Discussing these themes in English gives children opportunities to express feelings, opinions, and personal experiences. This not only improves language ability but also supports emotional growth.

Teachers play an important role in using stories effectively in English language classrooms. Selecting stories that match children’s age, interests, and language levels is essential. Teachers can support understanding by using pictures, asking questions, encouraging predictions, and connecting the story to children’s lives. Repetition is also valuable, as hearing the same story several times allows children to become more familiar with vocabulary and sentence structures.

Parents can also encourage language learning through storytelling at home. Reading English stories together, listening to audiobooks, or watching story-based programs can provide additional exposure to the language. A supportive environment where children feel comfortable experimenting with English can greatly improve their confidence and progress.

In conclusion, children’s stories have a powerful impact on learning English as a language. They provide children with opportunities to develop vocabulary, listening, speaking, reading, and grammar skills in an enjoyable and meaningful way. Beyond language learning, stories encourage imagination, creativity, cultural understanding, and emotional development. By making English learning engaging and enjoyable, children’s stories help young learners build a strong foundation for future communication and lifelong learning.

Saumya Aloysius

(A children’s writer contributing to both local and foreign newspapers as a freelance writer)

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Opinion

When governments destroy mangroves

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Any government that comes into power is a caretaker – of its people, environment and security. This is another glaring occasion where their lack of knowledge, or blatant disregard to the environment is causing long-lasting damage to this country.

After the devastation of the tsunami, then governments took the initiative to raise natural protection of the island by undertaking massive projects to plant mangroves. It was a long-term project, spanning 20 years, by the armed forces, to get these barriers up. Now the same army is used by this government to chop down these mangroves!!

This is happening right now in the Trincomalee lagoon. Nearly 40 lorry loads of mangrove forest have been taken away already. The excuse used for this is dengue control, a circular issued by the presidential secretariat in June. The ignorance is here; the seawater mixed lagoon does NOT breed mosquitoes. Trincomalee does not pop up in the dengue demographics, even as a high risk area. Yes, there is garbage, and plastic thrown into the mangroves that can be breeding grounds for mosquitoes. These can be cleared away in a clean-up operations, without harming the mangrove trees. It has been done a few times before, by previous government authorities, like coast conservation, who know the value of the mangrove belts. The local rumour becomes believable, that this deplorable act is done to please some local business partners of the area who run pleasure boats in the lagoon.

Yes, unhealthy mangroves can breed mosquitoes. But mangroves are ‘decease swamps’ is a dangerous myth. That mangroves are dirty, stagnant swamps teeming with decease carrying mosquitoes is a misconception that promotes harmful policies to control dengue outbreaks. This top myth justifies the illegal coastal clearance today in Trincomalee. It is destroying an important ecological asset of this country, mangroves, while failing to address the true root of dengue transmission. Where is the coast conservation department in this situ? Have they got CCD permission to carry out this butchery?

Healthy mangroves do not breed dengue mosquitoes, especially the one’s closely connected to the sea like in Trincomalee. The larvae needs completely still unmoving water to breathe at the surface, and mature. The power of tidal flushing which keeps water circulating in the mangroves makes this impossible. Also the daily ebb and flow of ocean tides keeps the water moving in the mangroves and frequently drains the forest floor. The natural hydrology of healthy mangroves, acts as an automatic self-regulating barrier against stagnant water collection, making viable breeding sites virtually impossible.

Also mangroves contain nature’s exterminators. It hosts a massive army of mosquito predators. These mangroves are not dead swamps but vibrant nurseries. Young Fish, dragon flies, crusteasians, and insectivorous birds are natural mosquito predators. Clearing mangroves collapses this natural food web, removing this natural pest control.

In fact, clearing mangroves is counterproductive and will backfire with worsened dengue cases. The heavy machinery will leave a scarred landscape with deep tyre tracks in the marshy soil making stagnant water pools and disrupted drainage. When rainwater fills these artificial depressions it will create perfect stagnant, predator free, fresh water pools, Ideal breeding grounds for Aedes aegypti. Also clearing this kind of buffers can bring in the urban sprawl with its people, housing, and garbage, to the new degraded land.

The collateral damage is even bigger. Destroying mangroves in the name of pest control leaves coastal populations poorer, hungrier, and highly vulnerable to extreme weather. One would have thought at least the people in the coast conservation department were knowledgeable enough about the loss of wave attenuation with removal of mangroves and the risk of flooding and storm surge damages to the coastal areas. Collapse of these fish nurseries should ring alarm bells in the fisheries department. Reduced fish harvest and loss of livelihood for the local fishermen should have had fisheries department people rushing to the site. But neither of the mentioned government departments have raised a murmur, in the face of political influence. This is the sad truth of the country at the moment. Sri Lanka’s climate resilience has been compromised by release of stored ‘blue carbon’ and a loss of natural buffer against rising sea levels, while the responsible people in the government are silent in front of an ignorant political hierarchy.

This is an appeal to the highest authority in the country to stop this environmentally insensitive projects of this nature being coughed up by ignorant municipal members. Clearing these forests directly violates so many policies on conservation. Our local fishermen depend entirely on healthy mangrove root systems—such as those being chopped down. From a health perspective, medical professionals have repeatedly assured us that under the current National Policy Framework, marshy lands and mangrove ecosystems pose no threat of dengue. We request your guidance and intervention to ensure our environment is not sacrificed.

Citizen S

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Opinion

Lankan hotels and price discrimination

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In planning a long trip to Sri Lanka from the UK, I was disappointed to see different hotel pricing for foreign visitors when compared to local rates. Like many travellers, I prefer to book directly with hotels, rather than international hotel consolidators, as more money goes to local businesses. But the assumption that foreigners should pay more is simply distasteful. As such, I’ve chosen another long-haul destination that does not follow such practices, and hope that Sri Lanka will change its approach to overseas visitors in the near future.

Neil Roskilly Wetherlee UK

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