Last week’s previously announced strike by employees of the Ceylon Petroleum Corporation (CPC) would surely have invoked memories of last year’s queue horrors outside filling stations and gas dealerships; this was not only in the minds of motorists and cooking gas consumers but also within a wider spectrum of the people subject to hours long power cuts. The success, if it may be so described, of the Ranil Wickremesinghe presidency up to now predates last month’s deal with the IMF. His government, no doubt because the country had stopped paying off its foreign debt and servicing loan obligations, was able to end the never-before-seen scenes of miles long queues countrywide. If it had been unable to do that, Wickremesinghe would have been past tense by now.

But all is not on the plus side of the ledger. Although the queues near filling stations were largely absent despite the CPC employees’ trade union action, there were shortages attributed to the non-placing of orders by dealers who anticipated a downward price revision in April. That was to be expected in the context of Power and Energy Minister Kanchana Wijesekera’s announcement to that effect. This was undoubtedly wrong speech on the part of the minister who projects an attractive picture in today’s political firmament. He is young, vigorous and speaks very fluent English and Sinhala. He minimizes appearances at press conferences often preferring to have his say through his twitter handle. His early announcement cost plenty.

At the height of last year’s fuel crisis when overnight waits in a queue was common, he introduced the eminently sensible fuel rationing system using a QR code. It may perhaps be argued that this arrangement could have been made earlier than it actually was. But better late than never. Undoubtedly there are some bucks being made by fuel pump attendants now fiddling the system in collusion with dishonest motorists; yet the scheme is working reasonably well and Wijesekera needs to be credited for that. Clearly the public is at odds with strikers causing them both massive inconvenience and hardship by work stoppages. This is most dramatic in the health sector beset with other problems, notably the shortage of essential medicines.

How far the standoff will go on now that the first shots have been fired remains to be seen. The minister has not ordered peremptory dismissal of strikers defying the Essential Service order now in force. Instead he has opted sending the union leaders, including one from his own Sri Lanka Podu Jana Peramuna (SLPP), on compulsory leave. They will also not be permitted within CPC premises. Further action will follow due investigation. The cat is among the canaries with a Samagi Jana Peramuna (SJB) unionist, previously of the UNP, in the prohibited list. Nobody would object to the presence of troops and police within CPC installations as it is a common union practice to intimidate so-called blacklegs.

As this is being written on Friday, fuel distribution appeared normal with both CPC and LIOC (Lanka Indian Oil Corporation) filling stations operating without let or hindrance. Small queues were visible at some sheds on Thursday but these were not more than 10 -15 vehicles long and were quickly cleared. Notices declaring ‘No stocks’ that were ubiquitous the last time round were conspicuously absent. Some tankers on their delivery runs were escorted obviously for the sake of prudence although they were clearly not under threat.

President Wickremesinghe has not even hinted at the possibility of a July 1980-style heavy handed approach used by the JRJ regime of that time fresh from its 1977 landslide. Tens of thousands of strikers lost their job on that occasion and political parties, encouraging unions aligned to them to back a putsch against a government elected with an unprecedented mandate, learned a bitter lesson. Wickremesinghe’s opponents are vocal about his capacity to emulate his Uncle Dickie. He first entered parliament in 1977 and was a favoured nephew of the then president.

The government has explained the decision to bring three new players into the petroleum business was intended to create competition that would benefit consumers. When Prime Minister Sirima Bandaranaike nationalized the petroleum import and distribution business in the early sixties, there were three foreign players in the market selling under the brand names of Shell, Caltex and Esso with Shell dominating marketshare. But at that time all three western players in a profitable business priced their petrol at the same rate and there was no price competition. While there was claimed competition on the service front (eg. one player would wipe a motorist’s windshield with a damp cloth while his tank was being filled) there was no real competition. Today CPC and LIOC usually price their products at the same level but there have been aberrations when LIOC found it was profitable to sell diesel above the CPC price to discourage sales.

One argument for nationalizing the petroleum industry in the early sixties was the possibility of procuring Russian oil. The entrenched players had their own suppliers connected to the western oil industry and procurement from the Soviet bloc was non-existent. Eventually the CPC was vested with a monopoly which continued till 2003 when Colombo introduced limited competition by allowing India’s state-owned Indian Oil Corporation to enter the market. Lanka Indian Oil Corporation PLC, (LIOC) which is quoted on the Colombo Stock Exchange will expand its footprint here with the entry of the new players. CPC employees, many holding sinecures and often recruited with political patronage, naturally resent the shrinking of the CPC monopoly and will resist it. That appears to be today’s state of play.

Saturday 1st April, 2023

The Anuradhapura Teaching Hospital (ATH) has been compelled to close its paediatric ward because all four paediatricians who worked there have left the country, according to media reports. This, we believe, is just the beginning of trouble in the health sector. The situation is bound to take a turn for the worse with other hospitals, too, having to downsize for want of doctors and other health professionals. The health service is not alone in this predicament. Human capital flight has taken its toll on all sectors. Universities are reportedly experiencing a severe dearth of teachers, and the crème de la crème of IT professionals are also leaving the country in droves, and the day may not be far off when Sri Lanka ceases to be attractive to foreign IT companies, which hire its youth. One of the main reasons for the disconcertingly unprecedented increase in the number of Sri Lankan professionals going overseas for employment is the newly-introduced tax regime, which has sent them reeling.

Government politicians and their apologists have sought to make light of the ongoing protests against tax increases by claiming that high income earners up in arms are only a miniscule section of the population, and the new tax regime has not adversely affected the vast majority of the public. This argument is seriously flawed, as could be seen from the plight of the children of Anuradhapura due to the closure of the ATH paediatric ward.

Moreover, the purchasing power of the middle class, which the protesting professionals belong to, is necessary for the country’s economic growth; it provides opportunities to various industries such as consumer goods, infrastructure, entertainment, leisure, travel, tourism and education. When it diminishes due to high taxes, rising inflation and increasing interest rates, the entire economy suffers. It is only natural that professionals tend to leave the country when their real income drops with no prospect of their lot improving in the foreseeable future. They are intelligent enough to see that it is nothing but stupid to leave the task of rebuilding the economy to the very politicians who ruined it!

The health sector has been plagued by numerous problems such as chronic drug shortage, and now it has another one to contend with. If it deteriorates further owing to the mass emigration of doctors, only the poor will suffer. Politicians are rich enough to pay for healthcare here or overseas. They, who have bankrupted the country, rush to Singapore if they ever so much as catch a cold while the ordinary people who pay through the nose to maintain them are wait-listed even for serious surgical procedures.

One may have reservations about doctors and other professionals and their trade unions, but it behoves the government to engage them and do whatever possible to redress their grievances, which are legitimate. They are not refusing to pay taxes; they are only asking for some relief. The Opposition has come up with a set of alternative tax proposals and revealed how to keep the PAYE tax at affordable levels without causing a drop in the state revenue.

Its views should be taken on board. Another way out may be to enhance the efficiency of the tax collection process. There are many tax evaders including professionals and big businesses, and if the government casts the net wide, it may be able to increase its tax revenue and grant some relief to those who are crying out for relief while paying taxes dutifully. Most of all, government leaders must meet the representatives of protesting trade unions, and make a genuine effort to work out a compromise formula, instead of going all out to frighten them into submission.

Friday 31st March, 2023

Some good news has thankfully emanated from the US amidst media reports full of gloom and doom. America is known as the land of opportunity, and with reason. Unfortunately, the US has opportunities presenting themselves to the good, the bad and the ugly alike. It therefore has its share of social evils including the extremely high incidence of gun violence, especially school shootings and the ever-increasing drug abuse.

The good news is that the US Food and Drug Administration (FDA) yesterday approved the sale of Narcan or opioid-overdose-reversing Naloxone nasal spray over the counter. This drug is expected to help save many lives being lost the world over daily due to overdoses of drugs such as heroin and fentanyl. The news of the FDA approval for Narcan broke while we were watching the unfolding drama at the Ceylon Petroleum Corporation (CPC), and thinking of the most effective antidote to the abuse of power, which has become as much a menace as narcotics in this country.

Narcotics, especially hell dust, and political power may look chalk and cheese or apples and oranges, but a close examination thereof, especially their ill-effects, will reveal some striking similarities between them. Both are highly addictive; they stupefy the addicts thereto and even drive them to mindless violence. It is extremely difficult to stop savouring power and chasing the dragon, and when addicts go cold turkey, they develop withdrawal symptoms and become aggressive and pose a danger to everyone around.

The political version of Narcan, in a manner of speaking, is the people’s franchise, which has the potential to counterbalance the abuse of power that is driving the grandees of the incumbent Rajapaksa-Wickremesinghe dispensation to resort to coercion to suppress democratic dissent, crush labour struggles, dispose of national assets, and compass their politico-economic ends.

What the striking trade unions have adduced in support of their industrial action is the proposed restructuring of the CPC. Restructuring and divestiture are interchangeable to all intents and purposes in this country. The Rajapaksa-Wickremesinghe government has not cared to obtain the views of other stakeholders, much less secure their concurrence, as regards the restructuring of the CPC, and is all out to railroad them into toeing its line. It is doing exactly the opposite of what the SLPP undertook to do and obtained two popular mandates for—one in 2019 and the other in 2020.

One of the main planks of the SLPP’s presidential and parliamentary election platforms was its much-avowed antipathy towards the divestiture of public assets. Condemning the privatisation by the UNP-led Yahapalana government of vital public ventures, the SLPP vowed to terminate the divestiture of the state-owned enterprises (SOEs) and other such public assets. But its leaders have unabashedly joined President Ranil Wickremesinghe, a defeated candidate, whom they themselves elevated to the highest position in the country, after his entry to Parliament via the National List, in holding a fire sale of SOEs, having bankrupted the country. They have demonstrated that they are followers of Machiavelli, according to whom “the promise given was a necessity of the past; the word broken is a necessity of the present.” What they are practising is the very antithesis of their election manifestos, and therefore their administration is devoid of legitimacy, which is a prerequisite for the imprimatur of political respectability and public acceptance. This fact has become evident from the outcome of a recent opinion survey, according to which the government’s approval rating has plummeted to an appalling 10 percent!

Those who fear or disregard the will of the public and delay or do away with elections are not fit to govern a country. Needless to say, they must not be allowed to commit a nation to long-term bilateral or multilateral agreements that will affect generations to come. The Rajapaksa-Wickremesinghe regime must hold a general election and ask for a popular mandate for the implementation of its economic programme or hold a referendum thereon. This is something the so-called international community, which claims to promote democracy and good governance, should take cognisance of. If its much-advertised concern about democracy is genuine, it ought to tie aid and trade concessions such as GSP Plus to the conduct of free and fair elections in the recipient countries.

What with the SLPP-UNP combine’s determination to delay the local government polls and carry out its economic programme sans public approval, the Opposition ought to up the ante and bring pressure to bear on the government to hold a general election. But this is a tall order for a bunch of lily-livered politicians who float like bees and sting like butterflies, so to speak.