Connect with us

News

Sri Lanka big business reaps huge profits during pandemic

Published

on

By Saman Gunadasa

Sri Lanka’s nine top companies amassed 364 billion rupees ($US1.8 billion) in earnings between April and June, collectively pocketing 21 billion rupees profit in the first quarter of their financial year.

This amount is only a fraction of the wealth secured by the super-rich and also seen in rising profits for the banks and other big companies so far this year.

In the first three months of 2021, listed companies on the Colombo Stock Market recorded 189 percent growth increase compared to the same period last year, with the largest earnings made by companies involved in finance, exports, logistics, liquor, health and stock trading.

Companies allowed to keep operating during the COVID-19 pandemic were some of the highest profit makers, in stark contrast to the devastating economic impact on workers, small entrepreneurs, self-employed and the poor who suffered sharp losses of income and jobs. As of yesterday, COVID-19 has taken the lives of more than 9,000 people in Sri Lanka with total infections climbing to over 425,000.

Among the top nine earners was Expolanka, a major logistics company with branches in 20 countries. It had a turnover of 95 billion rupees and 6.3 billion rupees net profit in the quarter.

In second place was LOLC, a leader in leasing, hire purchase, insurance and other financial activities. It earned 55 billion rupees with a 4 billion rupees net profit. Last year, LOLC pocketed 53 billion rupees after tax profit, the highest ever recorded by a Sri Lankan company. Its owner, Ishara Nanayakkara is one of the country’s top billionaires.

Hayleys and Vallibel One, a finance house owned by Dammika Perera, Sri Lanka’s richest individual, earned almost 90 billion rupees with combined net profit of 6.4 billion rupees in the April to June quarter.

The Hayleys conglomerate is involved in import-export industries related to rubber production and plantations with over 30,000 employees. Last year it generated 242 billion rupees in revenue and 14 billion rupees net profit, the highest ever during the company’s 143 years of existence.

John Keells, another top business firm, earned 38 billion rupees with 1.2 billion rupees net profit in the quarter. Tourism was the only component of the company impacted by the pandemic.

In addition to the top nine conglomerates, NDB, the country’s fourth largest private commercial bank, reported a net interest income of 5 billion rupees—a 15 percent increase from April to June compared to the same time last year. Sampath Bank reported a 34 percent rise in net interest income to 10.8 billion rupees in the same quarter.

Billionaire Dammika Perera was featured in the media last week, arrogantly declaring that Sri Lanka should not be locked down under any circumstances.

 “A government cannot run the country in a complete lockdown, can it?” he said, adding that without “dollar income via exports,” it could not import petrol, medicine, milk powder and other necessities. Perera said nothing about the massive export profits being amassed by his companies and other businesses.

Over the past month Sri Lankan President Gotabhaya Rajapakse, speaking on behalf of big business, opposed any lockdown amid rising COVID-19 infections and deaths and urgent calls of independent health experts for stringent health measures.

Limited lockdown restrictions reluctantly imposed on August 20 by Rajapakse, still allow big business to keep operating as essential services. Health experts have voiced their concerns about effectiveness of the government’s restrictions.

Last year President Rajapakse ordered the Central Bank to provide massive concessionary funds—a total of 230 billion rupees—to big businesses. Other financial facilities and more tax concessions were also handed out. Most corporate taxes, for example, were reduced to 14 and 18 percent, the lowest rates in South Asia.

Last December, Rajapakse told a Ceylon Chamber of Commerce conference that investors should “take up the opportunities” provided by the coronavirus pandemic.

Early last year the government, backed by the trade unions, gave businesses the right to retrench workers arbitrarily, ignoring the country’s existing, but limited, labour laws. Under the banner of dealing with the pandemic, employers were also allowed to impose wage cuts, increase workloads and slash working conditions.

Announcing his limited lockdown measures on August 20, Rajapakse called on the population to be prepared to make “more sacrifices.” Government ministers are already campaigning for the salaries of about 1.4 million of state sector workers to be cut by 50 percent.

Last week, the cabinet of ministers announced that they would donate a month’s salary to the COVID-19 Health Care and Security Fund. The “donation,” which has been embraced by government and opposition Samagi Jana Balavegaya MPs, is a media stunt by the ministers who receive more in perks than their monthly salaries. It is a public relations exercise in preparation for the slashing of state employees’ salaries.

The government has said it would provide 2,000 rupees for low-income families to cover the two-week lockdown. This is not even enough for one meal a day during the lockdown.

While big business is thriving, working people are being impacted by increasing prices for essential items. Inflation rates have been climbing since January and, on a year-on-year basis, were 6.1 percent in June and 6.8 percent in July. Food inflation was 11 percent in July, with non-food items 3.2 percent.

The Rajapakse government, which confronts falling foreign reserves—it only has enough for two months of imports—has banned the import of many essential food items and other goods.

Sri Lanka, according to a recent global survey by the Institute of Development Studies , is fourth in a list of countries—after Syria, Nigeria and Ethiopia—where basic food is the least affordable.

Last week, Health minister, Keheliya Rambukwella issued a gazette announcing a maximum price for 60 essential medical drugs. Ceylon Private Pharmacy Owners ’ Association president Chandika Gankanda, however, told the media that the gazette was used to increase the price of many drugs by 9 percent. The drugs listed in the gazette include painkillers given for those infected with COVID-19 or suffering with diabetes and high blood pressure.

Mired in huge foreign debts and falling export income, the Rajapakse regime has turned to the International Monetary Fund (IMF) and received a loan of about $800 million under the bank’s $650 billion program for member states.

Ajit Nivard Cabraal, the state minister for money and capital markets, jubilantly declared last week, that “the inflows we predicted are coming one by one,” adding that a $300 million loan was also being provided by China.

The IMF has insisted that any country receiving its loans must implement “restructuring programs” to overcome its economic difficulties. In other words, these loans will be paid for by even more ruthless austerity attacks on the working class and the poor by the Rajapakse government.



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News

DG Information ignorant of basic election laws and regulations: ECSL

Published

on

by PRIYAN DE SILVA

The Election Commission (EC) has expressed its disappointment at controversial statements made by some public officials about elections. It says some top government official, including the Director General of Government Information, are not familiar with the basic election laws and regulations laid down in the Constitution.

The EC says it may be due to his ignorance that the Director General of Government Information has issued the Special News Release, on 29 January, claiming that ‘the gazette notification, with the signatures of the Chairman, and other members of the Election Commission, required for the commencement of the Local Government Election process, has not yet been sent to the Government Press for printing’. The EC has said such notices have to be signed and sent by the relevant Returning Officers in accordance with section 38 of the Local Authorities Election (Amendment Act) No 16 of 2017, and not by the members of the EC.

The EC has confirmed that the notices from the Returning Officers were sent to the Government Press on Monday (30).

The EC’s Media release also points out that the DGI may be unaware that Article 104GG of the Constitution states that if any public official refuses or fails without a reasonable cause to comply with the Commission he or she has committed an offence.

Article 104GG of the Constitution says: (1) Any public officer, any employee of any public corporation, business or other undertaking vested in the Government under any other written law and any company registered or deemed to be registered under the Companies Act, No. 7 of 2007, in which the Government or any public corporation or local authority holds fifty percent or more of the shares of that company, who – (a) refuses or fails without a reasonable cause to cooperate with the Commission, to secure the enforcement of any law relating to the holding of an election or the conduct of a Referendum; or (b) fails without a reasonable cause to comply with any directions or guidelines issued by the Commission under sub-paragraph (a) of paragraph (4) or sub-paragraph (a) of paragraph (5), respectively, of Article 104B, shall be guilty of an offense and shall on conviction be liable to a fine not exceeding one hundred thousand rupees or to imprisonment for a term not exceeding three years or to both such fine and imprisonment.”

Continue Reading

News

AKD says no improvement at Sapugaskanda oil refinery since it went into production in 1969

Published

on

The capacity of the Sapugaskanda Oil Refinery (SOR) has not increased since it was established in 1969, National People’s Power (NPP) leader Anura Kumara Dissanayake says.

Speaking at a public rally recently he that in 1969, the SOR used the most advanced technology available at the time.

“CPC started construction in 1968 and SOR started operations, refining oil, on August 5th, 1969. During that time, the CPC could refine 50,000 MT of crude oil. 55 years later, the capacity remains the same. In 1969, the CPC started with the most advanced technology available at the time. Technology has improved now. We are still refining oil with 1969 technology,” he said.

Dissanayake said that Sri Lanka built a fertiliser factory to use the byproducts of the refinery and, in 1982, a newspaper reported that 5000 MT of urea, produced by that factory, was exported to Pakistan. Today, that factory is closed.

“The CPC also had a nylon factory, as a subsidiary. We built our own nylon thread fish nets. By-products of the refinery were used as pesticides and insecticides for our pineapple and flower production. Those factories were closed, too. We had a candle industry from the by-products, we produced lubricant oil. It was sold to American Caltex. Refinery produced fuel for airplanes. It has the capacity to sell USD 1.4 million worth airplane fuel per day. We can buy crude oil, refine, and sell to ships. These are opportunities we must use to earn foreign currency. Recently this section of the CPC was privatized,” he said.

The ruling class has failed to secure even the most important assets, he said. Agriculture, land, gems, ilmenite, our natural resources, so will these rulers protect what is left, he asked.

“They have absolutely no plan to build this country. Selling our resources, closing down factories and selling valuable machinery is what they know. Every government has taken part in the destruction of the refinery. This is why we need a change in the economy. We need to transform our economy. Only NPP can do that,” he said.

The NPP leader said that the existing constitution concentrates too much power in the hands of the executive president. Sri Lanka has had this executive presidential system for 40 years and executive power was used against the people, repressing them.

“Our economy was destroyed. It has done no good to this country. One man cannot develop the country. Individuals have capacities and limitations. We need to unite our capabilities to govern this country. It’s a collective effort and the NPP is the only party to undertake it. That’s the point of difference. There are talented people from all fields like history, economy, mathematics, law and so on. There are lawyers, university academics and professionals. The government has to unite these capacities and talents to bring optimum results for the country. NPP will do that. For that we have to abolish executive presidency and rewrite the constitution vesting more powers in the Parliament. We will bring about this change,” he said.

Dissanayake said an NPP administration will limit the number of Ministers to 18. He added that crossovers have distorted the democratic system and corrupted the political culture.

“People vote for them in one party but for money and positions they change political allegiance. This has become a public nuisance. Some MPs demand ransom to stay in the party. We will add a provision to the Constitution to ban crossing over,” he said.

Continue Reading

News

JVP: Where are President’s influential foreign friends?

Published

on

By Rathindra Kuruwita 

President Ranil Wickremesinghe, who assumed duties, claiming that he had very influential friends overseas, now claims he can hardly afford to pay government servants, National People’s Power (NPP) MP Vijitha Herath says.

“If anything, things are worse than before. The government is afraid of the people and is trying to postpone elections,” Herath said, adding that the March 09 local council election would mark the beginning of the end for the Ranil-Rajapaksa administration.

Herath said so addressing an NPP election rally recently.

 “They will no longer be able to pretend that the people are with them. Not that they have any legitimacy, locally or internationally, but the level of their unpopularity will be seen on 10 March,, when the poll results are announced” he said.

Continue Reading

Trending