The publication of Merril. J. Fernando’s autobiography last month is a useful peg to hang a discussion on the Ceylon tea industry – we advisedly call it Ceylon tea rather than Sri Lanka tea – as the former is the name by which this unique product is known globally. Merril Fernando, of course, needs no introduction. He is very well known in this country as the creator of the Dilmah brand he coined from the names of his two sons, Dilhan and Malik, which he took to the world outside making it the best known nationally owned tea brand in Sri Lanka. As we said in a review of the book last Sunday, MJF is not the country’s biggest tea exporter but his is the best known nationally-owned brand of Ceylon tea in the tea drinking world.
During the British colonial years and the early post-Independence period, tea was our major export and foreign exchange earner. But decades ago garments overtook tea and also, remittances from blue collar workers striking out overseas to support their families back home became a reckonable factor in the country’s foreign exchange budget. Net earnings from tea, obviously, was far higher than what garments, that had by far become the country’s largest manufacturing industry fairly quickly, brought in. That was because the imported input into tea was a fraction of what the clothing factories had to import to manufacture their product. This included not only fabrics but much more. The labour was the major value adding factor in the domestic garment industry.
The major imported input into the tea industry is fertilizer. Like garments, tea growing too is a labour intensive industry. Onetime Finance Minister Ronnie de Mel who presented 10 national budget for the J.R. Jayewardene regime from 1977 to 1988 once famously said that Sri Lanka’s economy sits on a tripod of women workers – those slaving on the tea fields, working in the garment factories and venturing out as domestic servants largely to the Middle East. Never were truer words spoken. The British brought in indentured Tamil labour from India to work on their tea estates under harsh conditions because the upcountry peasantry was reluctant for various reasons to work on the plantations. These were created at tremendous environmental cost on land sold for a pittance under the infamous Waste Lands Ordinance of 1840.
This stipulated that “all forest, waste, unoccupied or uncultivated land was to be presumed to be the property of the Crown until the contrary is proved.” This resulted in the denuding of the country’s mountain slopes clothed with montane rain forests providing the sponge-like catchments for the rivers flowing through the valleys. The price paid was irreparable ecological damage to first plant coffee and then tea. The upcountry peasantry lost their common grazing land and much more to this despoliation that brought fame and fortune to British plantation owning companies quoted on the London Stock Exchange. Ceylon tea soon earned the reputation of being the world’s best and Merril. J. Fernando in his memorable over six decade long journey through the industry retains at age 92 a passion for the product that was the foundation of his success.
Apart from very readable accounts of his upbringing and early years covered in the book, Fernando has dwelt on the exploitation of Ceylon tea by the British whose chief focus was the bottom line. He writes that during the period of his training as a tea-taster in the UK he was greatly distressed “by the ruthless exploitation of our tea industry and its workers that took place in London.” He had developed a great respect for the British as a result of his friendship with many Brits resident her e as well as his employers who controlled much of the tea export trade. But all that was shaken when he realized what was being done in London to Ceylon tea by the British who dominated the global tea trade in Mincing Lane, “the world’s undisputed tea center controlling and manipulating the distribution and marketing of tea from grower countries.” He says that resulted in producers, especially those in Ceylon, being held to ransom adding that we were then more vulnerable to market manipulation than any other grower as about 90% of national production was being exported, a large proportion going to the UK.
A major service rendered to Ceylon tea by Merril Fernando was his resistance to efforts to make Sri Lanka a so-called ‘tea hub’ by importing cheap teas and blending them with Ceylon tea. This would have been a profitable business but at the cost of both the unique character and reputation of Ceylon tea. In the middle seventies, as result of the JVPs 1971 adventure attributed by the then rulers to land hunger, the land reform laws compelled the sale 150,000 acres of British-owned sterling estates at a price of Rs. 1,125 an acre (pounds 42 and 50 pence). It was agreed that the compensation would be “prompt, effective (meaning may be remitted) and adequate.” Payment was concluded over four years. Rather than alleviate land hunger, the plantations were vested in two monolithic state corporation, the Sri Lanka State Plantations Corporation and the Janatha Estates Development Board.
Despite the presence of 23 Regional Plantation Companies managing state-owned plantations leased to them in 14 regions, 70% of Sri Lanka’s tea is produced by nearly half a million smallholders mostly in the low country. Today the industry is hard-pressed for labour with the tea workers lot way below minimum norms. But the industry remains a vital segment of the Sri Lankan economy.
The India – Canada spat
Opinion will surely be divided on whether Foreign Minister Ali Sabry should have waded into the ongoing spat between India and Canada on the assassination of a Sikh Canadian citizen allegedly by Indian agents according to Canadian Prime Minister Justin Trudeau. Sabry got a lot of media play in India characterizing Trudeau’s statement to Parliament as “outrageous.” Colombo, of course, continues to smart under the Canadian PM’s recent remarks about “genocide” in this country which Sabry says “everybody knows” did not happen. No wonder then our minister thought it fit to tell an Indian television station that “sometimes Prime Minister Trudeau comes out with outrageous and unsubstantiated allegations.”
Given India’s generosity to Sri Lanka during the ongoing economic crisis ,Colombo would surely like to score brownie points in New Delhi. This despite clear knowledge that free lunches are not part of global international relations and the need to steer clear of rivalries between India and China in big power contests. Sri Lanka professes non-alignment and is even now grappling with issues arising from an upcoming port call by a second Chinese research ship about which Indian and U.S. concerns have been expressed.
In such situations it makes sense in not resorting to the tit for tat reactions of the kind displayed by both Ottawa and New Delhi over the Hardeep Singh Nijjar assassination. Many would regard Minister Ali Sabry’s remarks on the India – China row as partly reflective of Colombo’s resentment of genocide and pro-LTTE references emanating from Canada.
Lankans, of course, are well aware that pro-LTTE rhetoric is part of domestic politics in Canada. Some 200,000 Sri Lankan Tamils, comprising about 0.7 percent of the total Canadian population live in that country. These numbers are sufficient to make a difference between the two major parties at elections and much of the Canadian political discourse reflects that factor.
Similarly, Sikhs are also a significant segment of the Canadian population with the highest population of Sikhs outside their home state of Punjab living in that country. According to the 2021 census, 770,000 Sikhs live in Canada and they would therefore be a more influential factor than Sri Lanka Tamils in Canadian domestic politics. Hence the various statements tilted towards these communities emanating from Canada.
Good relations with India must always be a cornerstone of Sri Lanka’s foreign policy. Such relations sank to abysmal depths during the civil war when India allowed the separatist LTTE to train and stage from Indian territory much to Sri Lanka’s detriment. The war would have probably ended long before it actually did in 2009 if Operation Vadamarachi was not aborted by India’s incursion into Sri Lanka’s air space and the infamous parippu airdrop.
The Indo – Lanka Accord and the arrival of the Indian Peace Keeping Force (IPKF) followed. Today it can be said that relations between us and our giant neighbour have never been better. True there are reservations that Big Brother is taking economic advantage of Sri Lanka’s current predicament but these are issues that must be sensibly navigated.
It must be noted that Prime Minister Trudeau did not claim ironclad evidence on the assassination of the Sikh activist in British Columbia. He merely said there were “credible allegations” (emphasis ours) on that score. Whether hard evidence could ever be unearthed on this matter is an open question. There have been media reports of early signs that both Canada and India, after the initial sound and fury, are resorting to quiet diplomacy to resolve their differences. That would be in the interest of both countries as well as the wider world.
There have also been reports that intercepts of diplomatic communications from the Indian High Commission in Ottawa possibly by the ‘Five Eyes’ intelligence grouping between Australia, Canada, New Zealand, United Kingdom and the U.S., had a role in Trudeau’s allegations. However that be, the Canadian premier would not have got out on a limb with his allegation, rightly or wrongly, if he was not convinced that he was on terra firma.
End of IMF review mission
Despite the polite noises made at its closing press conference, there appears to have been no agreement yet between the Government of Sri Lanka and the IMF review mission which concluded its two weeks-long visit on Wednesday. There was no word on when the disbursement of the second tranche of the deal would begin. There is no way that the IMF board will disburse the next tranche until the staff level agreement is concluded.
The closing statement reported “remarkable resilience” of the Sri Lankan people in the face of enormous challenges and “commendable progress” in implementing much needed reforms. While reporting a string of achievements it said that “discussions are ongoing” and the authorities are making progress on their revenue mobilization targets and anti-corruption efforts. But there was no word that a desired staff level agreement has been reached or when the funds will be released.
Two weeks ago when the review began, then acting Finance Minister Ranjit Siyambalapitiya said he was “very hopeful of getting the second tranche of $330 million” from the IMF. But obviously there is more ground to cover and the funds are not likely to be available in the short term. The Financial Times in Britain reported on Thursday that Sri Lanka has failed “to reach agreement to unlock the IMF bailout tranche” and “the delay threatens to slow the country’s recovery from the worst economic crisis in its history.”
Saturday 30th September, 2023
The government and the Opposition may be at daggers drawn, but they do see eye to eye on matters that are mutually beneficial to them, such as the MPs’ perks and privileges, which they jealously guard. Such concord and coadjuvancy, however, are conspicuous by their absence where issues that affect the national interest are concerned. Not even the country’s worst-ever crisis has prompted them to make peace and put their shoulders to the wheel jointly to drag the nation out of economic morass of their own making.
The Opposition has gleefully declared that the IMF bailout programme is dead in the water. It would have the public believe that the IMF delegation, which was here for a review of their programme, left unsatisfied with the government’s revenue shortfall, and the next tranche of the lender’s extended fund facility is not likely to be unlocked. Acting Finance Minister Shehan Semasinghe has denied the Opposition’s claim, insisting that the next installment of the IMF loan will be released soon, after some issues are hashed out with the IMF headquarters.
The Opposition seems to be deriving some perverse pleasure from the fact that the IMF has not announced the release of the second tranche of its loan immediately after the conclusion of the review meeting. It is bashing the government for the revenue shortfall, which the IMF has frowned on.
Taxes and tariffs have already been increased exponentially so much so that many professionals have left the country in a huff never to return; the Ceylon Electricity Board is reported to have asked the Public Utilities Commission’s nod for another price hike. How does the Opposition think the government could increase the state revenue further?
The Opposition insists that it will be able to resolve the economic crisis in next to no time when it forms a government. In other words, it will not reveal what it claims to be its secret formula for economic recovery until such time, regardless of the woes of the hapless public.
Elections are not likely to be held until the latter part of next year, and the Opposition cannot topple the government by parliamentary means anytime soon. Supposing its claim of being able to turn the economy around is true, then one can accuse it of cruelly perpetuating the suffering of the public to advance its political agenda.
The government ought to explain why it has failed to meet its revenue targets in spite of the unbearable economic burden it has heaped on the public by way of unprecedented tax and tariff hikes, which have brought about significant increase in the state revenue, compared to 2022.
This situation may be due to defects in the tax collection process, and the government’s failure to curtail its expenditure and prevent waste, losses caused by corruption and the mismanagement of public resources. If action is taken to sort them out, among other things, it may be possible to turn the economy around sooner than expected.
The Opposition, for its part, ought to keep a watchful eye on the economic recovery process while keeping pressure on the government to ensure frugal management of public resources and make a serious effort to curtail waste and corruption. Regrettably, instead of acting as an alternative government and facilitating economic recovery for the sake of the public, the Opposition has chosen to settle old political scores with some government leaders, bellow rhetoric and cry wolf ad nauseam. It claims that the government has failed, but the question is whether it has not.
The brainless and brain drain
Friday 29th September, 2023
The Rajapaksa-Wickremesinghe government continues to be at loggerheads with irate professionals, who are demanding solutions to their problems. Many of them have already left the country never to return thanks to the government’s callous disregard for their grievances.
University teachers staged a protest in Colombo the other day in a bid to jolt the government into addressing the various issues that affect the education sector, but it is doubtful whether they succeeded in their endeavour. Instead of heeding the voice of the educated Sri Lankans on the warpath, the government has chosen to unleash its propaganda hounds on them.
One of the main issues that drive resentful professionals to street protests is the unbearable personal taxes. They have made it abundantly clear that they are not refusing to pay taxes; they are only demanding some relief, given the unexpected circumstances that have left them struggling to make ends meet. They are also demanding that the country’s tax revenue be properly utilised.
The government does not care to curtail the waste of state resources, as can be seen from the sheer number of politicians and officials junketing overseas at the expense of the public. Why should millions of dollars be spent on their pleasure trips which are made out to be official visits? The Health Ministry has become a metaphor for corruption, but the government continues to defend the Health Minister and corrupt officials. The same goes for all other ministries.
The government is sure to use the IMF’s recent statement that Sri Lanka’s tax revenue is very low to justify its refusal to grant any relief to the protesting professionals. But if it streamlines tax collection, it may be able to increase its tax revenue without squeezing the fixed-income earners dry.
Parliament has reportedly decided to take up the multi-faceted problem of brain drain for debate––at last. The fact that it has not already had an extensive discussion on brain drain, much less striven to find a solution thereto, is proof of the appallingly low priority it has assigned to this vital issue, which will have a bearing on the country’s future.
Regrettably, some government members do not seem to have realised the gravity of brain drain. If their unintelligent utterances in Parliament are anything to go by, they are labouring under the misconception that the exodus of Sri Lankan professionals is not something bad; they have said it will help boost the country’s inward remittances! They have mistakenly equated the mass emigration of the country’s best brains for good with the migration of unskilled workers. Figuring out the gravity of a problem is half the battle in finding a solution.
The worst that can happen to a country is for its educated youth to think they have no future at home, for their disillusionment manifests itself in brain drain, reduced innovation and socio-political unrest. True, brain drain is a global phenomenon that affects all countries to varying degrees, but it becomes a crisis when it assumes exodus proportions, as has been Sri Lanka’s experience. The ever-increasing human capital flight, which has adversely impacted all sectors here, is bound to make the task of resolving the country’s economic crisis even more uphill.
The task of having a comprehensive debate on so complex an issue as brain drain, with emphasis on its causes, consequences and a potential solution, requires brains.
What the so-called people’s representatives on both sides of the House, maintained with public funds, ought to do is to have a decent debate on the issue, confess collectively to having ruined the economy, show some remorse for their wrongful actions and dereliction of duty, resolve to avoid their past mistakes and make a concerted effort to sort out the economy.
If they are going to play the blame game once again, resort to slanging matches replete with invectives and raw filth, and drag one another’s names through the mud, as they often do, they might as well forget about the debate they are scheduled to have on brain drain.
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