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Editorial

Prorogation

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Governments not infrequently prorogue parliament when they are in trouble. Perhaps the best example of that in Sri Lanka’s contemporary history was President Premadasa’s prorogation of the legislature when he was confronted with an impeachment resolution in September 1991. That enabled him to buy some time to fight the effort to dethrone him. There is no escaping the reality that the present dispensation is in trouble, massively unpopular in the country within two years of its comfortable election with a two thirds majority in 2020. This after President Gotabaya Rajapaksa had, also comfortably, won the presidency the previous November.

But the recent prorogation cannot by any stretch of imagination be considered a time buying exercise. With the budget concluded and carried with a two thirds majority, parliament went into regular recess until Jan. 10 next year. Subsequent to the current prorogation at midnight on Dec. 12, the date of its reconvening has been put off till Jan. 18. So if there was time buying, it was a mere seven days. Undoubtedly, parliament not sitting right now has spared the government a great deal of embarrassment.

Despite that hard reality, critics have been quick to seize the opportunity to allege among other matters that government has resorted to a prorogation strategy to halt the work of parliamentary watchdog committees like COPE, COPA and the PAC with a view to reconstituting them when sittings resume in January. Some of these committees have been making embarrassing revelations and more can be expected in the future. They are all headed by government MPs, some of them disgruntled about being deprived of long-held cabinet positions.

The gas explosions continue unabated and the authorities are hard-pressed to explain what they are going to do about it; or why nothing has been done for this long. A formidable opposition has developed within the government to the New Fortress Energy deal, allegedly concluded in a clandestine and questionable manner. That is presently under challenge in the Supreme Court. Three cabinet ministers are among the petitioners thumbing their noses at the government. They continue in office and to hell with collective cabinet responsibility. Despite the many strident “go if you don’t agree” demands at various levels of government, they have not resigned and the government has not dared to sack them.

The cost of living has gone through the roof to unprecedented highs. So much so, UNP Deputy Leader Ruwan Wijewardene went public with the remark a few days ago that people are paying Rs. 15 for a single bean pod and Rs. 25 for a carrot! Covid, the weather and, not least, the ill-conceived ban on chemical fertilizers, weedicides and insecticides has obviously contributed to the scarcity and high prices of vegetables. Foreign reserves have plummeted to unprecedented lows and the country’s ability to meet its debt repayment obligations remains in doubt with Sri Lanka risking its non-default reputation.

So parliament, where the opposition can tub-thump on all these matters and more, not being in session is a distinct advantage to the government. No wonder then that the prorogation is perceived by many to be a defensive strategy of a government with its back to the wall.


Lest we forget

The people of this country to a man (and also woman and child) reacted with horror to the brutal murder of a Lankan manager of a garment factory in Pakistan a couple of weeks ago. His offence was alleged blasphemy. The atrocity occurred in the midst of a strike in the factory he was employed in and the brutality of that act of mob violence grabbed headlines not only here, but also in other parts of the world.

Pakistani Prime Minster Imran Khan reacted quickly and correctly expressing deep distress about what had happened, swiftly activating his country’s law enforcement agencies that have already made over a hundred arrests. He also conferred his country’s second highest national honour on a brave Pakistani individual who risked his own life in an abortive bid to save the victim from a savage mob of religious zealots.

We refer to this subject that has now retreated to the back burner in terms of news value in the context of an article we run in this issue of our newspaper. The writer, who is a regular and valued contributor to our columns, has reminded that we ourselves, while condemning what happened in Pakistan recently, must never forget Black July 1983 when similar events were widespread in this country. They were as horrible as what happened in Sialkot; more so in that such terror was not unleashed on a single individual but on an entire community of our own people in many parts of this country.

The law enforcers closed their eyes to what was happening and a president with a reputation for nerves of steel – the commander-in-chief of the armed forces and minister of defence – did nothing to stop the mayhem and accord to our Tamil citizen the protection that was rightfully theirs.

Many of those reacting to the recent event in Pakistan were not even born when the 1983 riots occurred, driving some of our best and brightest out of the country and strengthening the LTTE both at home and globally. This prolonged the civil war that stretched for nearly three decades. It blackened our image and cost our country hugely both in human and economic terms. Nearly 20 years after the war ended, we have not been able to recover the ground we lost and the price we paid while being ruled by a government that shamelessly called itself dharmishta.



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Editorial

Another ‘loincloth remedy’

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Monday 17th January, 2022

Now, anyone could import rice, paying as little as 25 cents a kilo as duty. Trade Minister Bandula Gunawardena has said the government decision is aimed at preventing a rice shortage and bringing rice prices down. But the question is whether enough foreign exchange is available for rice imports. Minster Gunawardena himself has admitted that there are already 500 freight containers of rice at the Colombo Port pending clearance. The power and energy sectors are in a mega crisis as the country is without enough dollars to pay for fuel imports. Most industries dependent on imported raw materials are struggling to stay afloat; some of them have already gone belly up. Will the Trade Minister or any other SLPP grandee claiming to be well versed in the dismal science explain how forex will be found for rice imports?

The rice shortage and attendant price increases have come about for two reasons. One is the fertiliser shortage, which has resulted in a sharp drop in the Maha yield, and the other is hoarding by big-time millers and wholesalers. The government is not willing to change its fertiliser policy, which has run into stiff resistance from resentful farmers, and it is too impotent to take on the Millers’ Mafia, which has become a law unto itself as politicians benefit from its largesse during elections.

Rice imports are only a band-aid remedy. True, any essential commodity has to be imported in case of a severe shortfall in the domestic supply thereof, but such measures must necessarily be short-term; the government does not seem to know when it will be able to stop rice imports. Unless the fertiliser crisis is resolved urgently, rice imports will go on until the end of time, and several other agricultural products, too, will have to be imported. The country’s food security will be pie in the sky in such an eventuality.

SLPP MP and former President Maithripala Sirisena has, in an interview with Siyatha TV, said he wonders whether there is a move to discourage farmers from engaging in agriculture and drive them to sell their lands to private companies. Multinational corporations have already acquired large extents of land for commercial agriculture here; prominent among them is an international banana producer, which got a foothold here during the previous Rajapaksa government. The present-day leaders seem relentless in their efforts to turn this country into a banana republic.

Meanwhile, let Sirisena be told that his family is also responsible for farmers’ woes; his brother, Dudley, is one of the millers who make unconscionable profits by exploiting both the farmer and the consumer alike; and his relative, State Minister Siripala Gamlath, is also a miller thriving at the expense of the poor paddy farmers and hapless consumers. Shouldn’t he put his own house in order instead of shedding copious tears for farmers and consumers?

Whether the government is working according to a secret plan to make farmers fed up with agriculture, one may not know, but its wrong agricultural policies are fraught with the danger of discouraging the farming community. When farmers suffer massive yield losses, and cannot recover production costs, much less redeem their valuables pawned to raise funds for cultivation purposes, they will be left with no alternative but to vote with their feet. Some of them have already done so, and unless this trend is arrested urgently, the country’s economic crisis will worsen with more dollars having to be spent on food imports. Besides, rural poverty will increase exponentially, and the farmers reduced to penury are likely to migrate to urban centres looking for jobs that are not there. The country may run out of dollars at this rate, and therefore the people will have to starve if imports are promoted as government policy at the expense of the local production of main food items. (We might achieve self-sufficiency only in turmeric!)

The government’s decision to promote imports as a solution to the rice shortage instead of addressing the root causes of the problem is like using a loincloth to control diarrhoea, as a local saying goes.

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Editorial

The galloping stock market

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The booming Colombo Stock Exchange (CSE) last week, after a two-year Covid-impelled silence, hosted its first news conference to share with the media what its chairman, Mr. Dumith Fernando, called a “fantastic story.” He was not exaggerating even slightly. The CSE’s performance last year was more that extraordinary by any standard with several historical highs established in all the indicators that matter. These included the heights reached by both the broader All Share Price Index (ASPI) and S&P 20 measuring the performance of the more liquid and better rated stock. There was also the daily average turnover, which even in highly depreciated rupee terms, that not long ago was computed in the millions is now running into billions. On top of that, there was the equity capital raising initiatives of companies seeking new listings on the trading boards of the exchange. Once upon a time, the CSE laboured might and main to persuade companies to list. But now, companies are jostling in the queue to obtain a quotation and these, without exception, have been several times over-subscribed on the opening day itself. Such successes mean millions, if not billions, of rupees of zero cost capital for newly listed companies.

The story goes on. There are those whispering or derisively labeling the current surge in the stock market as looking very much like something out of Ripley’s Believe It or Not – a “phantom market,” as the CSE boss put it, that is not supported by fundamentals. Such suspicion is inevitable in the context of a rapidly declining economy but with a paradoxically booming stock market running alongside. Fernando easily demolished that contention. There are many reasons, he said, for what the exchange calls the “quantum leap” in the market last year. Not the least among them is the plummeting deposit interest rates now down to single digits. People who once squirreled away their savings in banks or much higher interest paying but riskier finance company fixed deposits, have now found that the CSE has opened possibilities of much better returns in a scenario of plunging interest rates. No wonder then that a new class of investors, far removed from the business savvy high net worth persons who traditionally invested in what they judged as ‘good’ company shares, have become active in the stock market. The old guard looked for a steady dividend stream and capital appreciation in the longer term. Some of them did trade their shares making tidy, if not super, profits. But a large number held their stock over the longer term. The new investors are a different kettle of fish. They are looking for quick, often instant, trading profits, seldom investing in the longer term.

Today there are droves of what the market calls ‘retailers,’ – relatively small investors with little capital to play with, attracted to the CSE like moths to light. They see many possibilities to earn themselves some good money in the stock market and a record number of new investors, most of them 40-years or younger, have opened trading accounts. Today market players don’t have to visit share-broker offices and wrestle with all kinds of paper work to become active traders. They can do it all from their homes or offices armed with no more than one of those ubiquitous smart phones that many own today. Both brokers and the CSE itself are digtized and offer a modern trading platform nearly on par with what is available in more advanced markets.

Records established by the CSE last year includes the number of new listings up on the trading boards. Dumith Fernando said at the news briefing that last year, mainly in the latter part of 2021, there were as many as 13 initial public offerings. All of them attracted stunning investor interest being oversubscribed, sometimes several times over, on the opening day itself. Analysts confirm that many of these shares gained from their issue prices when trading commenced days later though there was at least one exception. But the general picture was instant profit for many small investors whose trading strategy is to take profit and invest funds realized in selling shares in new shares where they believe further profit is possible. They grumble about inadequate allocations due to the high demand for the shares on offer. But issuers generally tend to be fair to small investors.

Brokers say that the same share is often bought and sold, by a single punter, who will do multiple transactions in the course of a single trading day. Like betting on horses, gambling on a stock exchange is not without risk. But the fact that new players keep entering the market by the day suggests that the risk is much less than at the races and one player’s success attract many new players into the market. Where retailers are concerned, the herd instinct is very much in evidence with interest in a single counter drawing hordes of players into it, rightly or wrongly. The CSE website is full of notifications of the attention of listed companies being drawn into unusual trading activity in their shares. The inevitable response is that the company is unaware of any undisclosed price sensitive information that may have attracted unusual investor interest. Brokers say that low-priced shares may attract interest in a market where an upward trajectory as seen here was all too evident in recent weeks.

How long the carnival will last is anybody’s guess. But there are many putting their money where their gut instincts tell them that there’s more to be made.

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Editorial

Confusion worse confounded

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Saturday 15th January, 2022

People’s attention has shifted from gas explosions, economic woes, forex crisis, power cuts, and other such burning problems to another very serious issue––the detection of a grenade inside All Saints Church, Borella. The manner in which the police are conducting investigations into the incident has given rise to a controversy with the Catholic clergy claiming that the investigators have been barking up the wrong tree. They have produced proof in support of their argument, which sounds cogent.

No sooner had the grenade been found in the church than a person who cleans the shrine was taken into custody on the basis of CCTV footage. He is said to be seen in the video picking up something and placing it behind a statue. Interrogations have led to the arrest of a boy, who is alleged to have been involved in the incident. This is the angle from which the police have chosen to probe the incident. Investigations are continuing.

Archbishop of Colombo Malcolm Cardinal Ranjith tells us something entirely different from the cops’ tale. He has told the media that the police have arrested the wrong person; he has released another part of the CCTV footage at issue, where a man carrying something in a shopping bag is seen entering the church, hanging around there for a while and leaving. The church leaders insist that the police did not examine the entire video carefully, and rushed to conclusions after watching only a part of it. The police ought to explain why they did not do so.

Public Security Minister Sarath Weerasekera has disputed the Cardinal’s assertion and stood by the police. He says irrefutable evidence is already available to prove the charges against the church worker. He has drawn parallels between the church incident and the detection of a grenade at Lanka Hospital a few moons ago.

These different versions of the grenade incident have left the public confused. Who is the man seen in the video? Could he be the person who placed the grenade in the church? The police will have to trace him immediately if they are to allay doubts in the minds of people and the Catholic priests. There are so many CCTV cameras in the vicinity of the church, and it cannot be a difficult task for the police to find the suspect.

One tends to doubt what the police say because they have lost their credibility, and become putty in the hands of politicians. It is popularly said that he that has an ill name is half-hanged. The police have earned notoriety for arresting innocent people in most cases. The arrest of a former LTTE cadre over the execution-style killing of two policemen at Vavunathivu in December 2018 is a case in point. It took several months for the police to find out that the policemen had been killed by the National Thowheed Jamaath terrorists, who subsequently carried out the Easter Sunday attacks. Had they conducted a proper investigation without rushing to conclusions, and arrested the cop killers, perhaps the Easter Sunday carnage could have been prevented.

The police will have to probe the Borella incident from all angles, taking under advisement what the Cardinal and other prelates have said about it. Investigations must be conducted in a transparent manner, and no room left for doubts. Most of all, the police ought to bear in mind that there’ll be hell to pay if they have bungled.

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